ENERGY INNOVATION
at the DEPARTMENT of DEFENSE
ASSESSING the OPPORTUNITIES
March 2012
Consortium for Science, Policy and Outcomes
at Arizona State University
ENERGY INNOVATION
at the DEPARTMENT of DEFENSE
ASSESSING the OPPORTUNITIES
Daniel Sarewitz and Samuel Thernstrom
Co-Directors
John Alic
Technical Consultant and Writer
Travis Doom
Research Assistant
A joint project of CSPO and CATF
made possible through the support
of the Bipartisan Policy Center and
the Nathan Cummings Foundation.
TABLE OF CONTENTS
2
INTRODUCTION
Defense Department Energy Innovation: Needs and Capabilities
4
1 | Defense Department Energy
Innovation: Three Cases
John Alic
15
2 | Military Installations and
Energy Technology Innovation
Jeffrey Marqusee
32
3 |The Dynamics of Military
Innovation and the Prospects for
Defense-Led Energy Innovation
Eugene Gholz
41
4 |The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
William B. Bonvillian and Richard Van Atta 46
Introduction
In recent years, driven by the demands of combat in Iraq and Afghanistan, as well as looming budgetary
stress, the United States Department of Defense has increasingly focused on the ways in which energy affects its operations
and the opportunities to improve its performance through the development and adoption of innovative energy technologies
and practices.
Many observers see in this new focus exciting opportunities in the intersection of two powerful forces within one
institution: the most potent engine of technological innovation in human history, and the unparalleled energy demands of
national defense. DoD’s historical record on energy innovation is extraordinary, and there is reason to hope that important
advances might come from a renewed effort in this area. But there also appear at present to be significant limitations
upon the scope and scale of DoD’s likely influence on technological advance that can contribute to the nation’s energy
infrastructure as a whole, and particularly to the development and deployment of low-carbon energy systems that might
affect the rate of climate change.
This report explores the landscape of these questions: What are the innovation models that have proven successful at DoD,
and how might they be applied to develop and commercialize clean energy today, either within DoD itself or in other federal
agencies?
To better understand this landscape, the report first provides an overall synthesis of key issues surrounding energy
innovation at DoD, and then presents four papers that explore distinctive perspectives and elements of the DoD innovation
process. As a whole, we hope the report adds up to a richly detailed analysis of specific institutional attributes of the DoD
innovation system that seem relevant to the energy innovation challenge. Can policymakers successfully apply these
lessons and capabilities to the context of the nation’s civilian energy needs?
Key attributes of innovation at DoD identified in our report include:
n
The strategic value of end-to-end research, development, demonstration, and deployment of technological systems;
and specifically, DoD’s focus on testing, evaluation, and continual systems improvement;
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
2
INTRODUCTION
n
The powerful effects of large and sustained procurement programs that are closely tied to the department’s
innovation capabilities;
n
The proven effectiveness of two very different but highly effective innovation models: the widely extolled Defense
Advanced Research Projects Agency, and the Strategic Environmental Research and Development/Environmental
Security Technology Certification programs; and
n
The importance of DoD’s relations with commercial firms, and the related ability to guide and assess the effectiveness
of its innovation activities in the context of its mission performance.
Limitations
Despite the apparent potential for progress in linking DoD to energy innovation in light of these attributes, there are
also real reasons to question how much, or how easily, DoD’s innovation capacity can or will be applied to the energy
challenges that are most relevant to our national and global environmental goals. DoD offers important institutional
lessons, and models for innovation driven by the defense mission—but lessons and models that may not always translate
easily to the energy context.
DoD’s ability to house supply and demand under one roof, and to produce lasting improvements in complex
systems over time, driven in part by large, sustained procurement programs, is nearly unique—and unlikely to be widely
reproduced in the energy and climate context. There are significant constraints upon what DoD is likely to do directly in
this area; the department is unlikely to become an all-purpose engine of energy innovation. Instead, it must be assumed
that DoD innovation efforts will focus on technologies that are most likely to contribute to the military’s mission. The
extent to which these technologies have the potential to catalyze innovation relevant to large-scale reduction of global
greenhouse gas emissions remains to be seen. An important open question in this regard is the degree to which DoD
will see zero carbon baseload energy generation for its fixed installations as an area worthy of investments. For example,
the development and deployment of advanced nuclear reactor designs such as small modular reactors is one potentially
important opportunity to advance both military and civilian interests.
The Challenge
One challenge for policymakers concerned about energy and climate, then, is to maximize the ways in which DoD can
contribute directly to progress on key energy-related technologies in ways that advance, or at least do not impede, the
security mission. But policymakers must also think seriously about the ways in which the DoD innovation model can be
applied beyond its institutional borders, and about what the DoD experience suggests with regards to the prospects for
other proposals to enhance our national energy innovation systems.
Indeed, the principles that have animated successful innovation systems in the past appear increasingly clear—and are
often absent from current discussions about energy innovation policy. The military-industrial complex that allowed America
to win the Cold War was not built on a system of balkanized, technology-specific budgetary line-items and individual,
disconnected institutional capabilities. Rather, it was a complex, highly integrated, multisectoral innovation ecosystem. Is it
conceivable that we could move toward such a model for energy innovation?
DoD is doing a lot to advance energy innovation, and should continue to do so—but we must also be realistic in
our expectations for the ultimate outcome of these efforts, unless greater attempts are made to consciously align DoD’s
efforts with larger national goals and resources, or unless institutions outside of DoD are able to re-create some of the key
attributes of the defense innovation system.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
3
INTRODUCTION
Defense Department Energy Innovation:
Needs and Capabilities
In its reliance on energy, the U.S. military resembles other parts
of society. At hundreds of bases in the United States and abroad,
and in the communities surrounding them, military personnel
and their families live and work in buildings heated by gas and
lighted by electricity. Whether military or civilian, ships, planes,
and vehicles run on petroleum. Commuters head to work with
battery-powered mobile phones and digital tablets; soldiers
head into combat carrying radios, GPS units, and night vision
systems—and plenty of spare batteries.
This project explored three topics that link the innovation
capabilities of the Department of Defense (DoD) with the
military’s current and future energy-related needs. Stated as
questions, the three topics are these:
This report gives our answers. The basis includes the three
case studies and three commissioned white papers that follow.1
Drafts of the white papers and case studies served as the basis
for a workshop that brought together two dozen experts on
energy, innovation, and military affairs.2 The analysis, findings,
and conclusions that follow are, however, attributable only to
the lead project organizers.3
Our work draws upon, and extends, an earlier analysis of
energy-climate innovation, likewise grounded in case studies
and expert workshops.4 That study examined three technologies
(solar photovoltaics, carbon capture and storage, and direct
air capture of carbon dioxide), compared them to nonenergy
innovations, and also compared the innovation-supporting
activities of the Department of Energy (DOE) to other federal
agencies, including DoD. Here, in recognition of DoD’s unique
institutional capacity for influencing technological change, we
seek a deeper understanding of military innovation—how it
works, and what defense agencies bring to the quest for lowcarbon energy technologies.
Our earlier work led to four basic principles for invigorating
energy-climate innovation:5
1) Just how does DoD innovate? What are the ingredients that
have made for success in historical cases such as jet engine
development? What factors distinguish DoD’s capacity for
innovation from that of other federal agencies?
2) What, more narrowly, can be said about needs and
opportunities for future DoD contributions to particular
energy technologies such as alternative (nonpetroleum)
fuels?
1) Intragovernmental competition should be encouraged.
3) More broadly, how might DoD’s capabilities contribute to the
larger set of national needs in energy technology—particularly
the need for low- and zero-carbon energy technologies?
1 2 3
4
5
2) Congress and the administration should treat decarbonization
as a public good.
All are also available at www.cspo.org/projects/eisbu/.
A list of workshop participants can be found at the end of this report. The workshop was held in Washington, DC, on May 25, 2011.
Daniel Sarewitz, Samuel Thernstrom, John Alic, and Travis Doom.
Innovation Policy for Climate Change (Washington, DC: Consortium for Science, Policy & Outcomes; and Boston, MA: Clean Air Task Force, September 2009), www.cspo.org/projects/eisbu/.
Innovation Policy for Climate Change, pp. 2–3 and 37–38.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
4
Defense Department Energy Innovation:
Needs and Capabilities
work, in the extreme during times of war. While engineers,
scientists, and astronauts with extensive specialized training
operate the systems of the National Aeronautics and Space
Administration, for example, ordinary military personnel, many of
them recent high school graduates, operate and maintain much
of what DoD buys. For such reasons, the user community that
DoD procurement supplies is more typical of consumers in the
nation as a whole.
Because DoD pays for the development of a vast array
of systems and equipment used on an everyday basis, the
services and their contractors have strong incentives to manage
innovation with practical ends in view, to demonstrate new
technologies and test them extensively before placing them
in the hands of ordinary military personnel, to extract “lessons
learned” from operating experience, and to feed those lessons
back into the ongoing process of innovation. DoD benefits from
sources and scales of feedback into the process of innovation
that other agencies generally do not have.
3) Weak forces of demand, characteristic of new energy
technologies, make testing and demonstration especially
important, and government must learn to manage this
aspect of publicly supported R&D more effectively.
4) Feedback from customers and final users drives all
innovation, making procurement, consistent with a public
goods model, a powerful lever, underutilized in the case
of energy technologies.
We now amplify these principles in the context of DoD and
its national defense mission.
Competition. The military services, independent of one
another until after World War II and retaining substantial
autonomy, both cooperate and compete. Innovation has been
a byproduct of rivalry between the Army, Navy, and Air Force
for roles and missions, and for budget authority. When two or
more of the services have common technical interests, as in gas
turbines and jet engines, they often work together effectively,
fostering innovation. Absence of internal competition, on the
other hand, may mean some avenues for potential performance
gains will be overlooked, as appears to be the case for low-power
electronics as a means of reducing the number and weight of
batteries carried by foot soldiers.
Public Goods. Defense is a classic public good, something
that, like reduction of global greenhouse gases (GHG) emissions,
individuals and communities cannot provide for themselves. DoD
energy innovations can simultaneously contribute to the public
goods of national security and advancing technologies that can
help decarbonize the nation’s energy system. However, because
the national security mission will always have priority, DoD’s
contributions to GHG mitigation will depend on the extent to
which the mission-driven needs of the services are aligned with
needs for low-carbon energy and energy-related innovations in
society at large.
Demonstration. DoD, far more than any other government
agency, funds the development of technological systems
through the full spectrum of innovation activities, from
conceptual design to production, and does so as an integral part
of an essential national mission. Demonstration, testing, and
feedback from the field are intrinsic parts of the R&D spectrum,
activities that link design and development with customers and
final users and also link private firms, which bring innovations
to fruition, with the public sector. DoD devotes a substantial
share of its R&D spending to testing and demonstration. Other
government agencies, lacking strong connection between their
missions and their R&D activities, thus lack as well DoD’s capacity
to create the robust feedback linkages that are so important for
the practical realization of new technologies.
Procurement. DoD, again on a unique scale in government,
purchases technical systems in quantity. These systems must
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
Military Innovation: How It Works
The Cold War shaped the U.S. military’s approach to innovation.
Pentagon managers and their counterparts in the defense
industry know that lives and national security depend on how
well they do their jobs. Fears of World War III may be gone, but
technology retains its prominence in military policy as U.S. troops
with their ceramic body armor, unmanned aerial vehicles (UAVs),
and MRAPs (Mine Resistant Ambush Protected vehicles) fight on
in Afghanistan.
DoD integrates into the pursuit of its mission the full panoply
of R&D functions found in the private sector (box 1.1). Other
agencies such as the Department of Energy aim to catalyze
private sector innovation, but since the accomplishment of their
mission does not usually require them to purchase the products
of the research they support, they often must make decisions
without benefit of the guidance that DoD managers take from
planning and foresight exercises that go on constantly within the
services. DoD is also unique among agencies in the degree to
which its technology spending flows to private firms rather than
to its own laboratories or to universities and other nonprofits. The
sums are large—some $235 billion for R&D and procurement in
fiscal 2011—and by other measures, too, DoD commands greater
innovative capacity than the rest of government. The Army, Navy,
and Air Force, for example, employ nearly 100,000 engineers
and scientists between them. Most of the people, and most of
the money, support acquisition of systems and equipment from
firms in the extended defense industry (which is perhaps best
thought of as a virtual industry). Eugene Gholz’s white paper, “The
Dynamics of Military Innovation and the Prospects for DefenseLed Energy Innovation,” discusses the relationships between DoD
and its contractors.
5
Defense Department Energy Innovation:
Needs and Capabilities
Box 1.1 Defense Acquisition and “Full Spectrum” R&D
Most of the dollars that support military technology development flow through DoD’s acquisition budget.
In Pentagon terminology, acquisition includes both R&D—or RDT&E, for research, development, test, and
evaluation—and procurement. RDT&E claims over one-third of the acquisition budget.a The money supports
DoD’s many internal laboratories and technical agencies, including the Defense Advanced Research Projects Agency
(DARPA). (The white paper by William B. Bonvillian and Richard Van Atta, “The Energy Technology Challenge—
Comparing the DARPA and ARPA-E Models,” provides an authoritative analysis of DARPA, a storied innovation
seedbed.) The majority of RDT&E funds, however, pay for the design and development of particular weapons
systems, work carried out primarily by private firms under contract.
Demonstration and testing account for a substantial share of the RDT&E budget. In fiscal 2011, funding categories
labeled “system development and demonstration” and “operational systems development” claimed 60 percent of
RDT&E dollars.b Much R&D by private firms serving civilian markets, whether automakers or computer software
developers, explores how well prospective new products satisfy customer needs (actual needs, as opposed to
expressed desires), seeks reductions in costs and gains in reliability, and otherwise meets marketplace demands.
Likewise in defense, demonstration and testing are an inherent part of design and development. DoD’s capabilities
in testing and demonstration, as illustrated by the test beds for infrastructural energy technologies described in
Jeffrey Marqusee’s white paper, “Military Installations and Energy Technology Innovation,” have few counterparts
elsewhere in government.
Only about 15 percent of RDT&E falls under what DoD calls its Science and Technology (S&T) program. This
includes basic research, applied research, and a third budget category labeled advanced technology development.
The S&T program provides the closest parallels to the sort of work almost exclusively supported by other federal
agencies. Within the Department of Energy, notably, the Office of Science gets the largest slice of R&D funding,
in fiscal 2011 nearly $5 billion. As Bonvillian and Van Atta observe in their white paper, the Office of Science
“views itself as a basic research agency, and rejects work on applied research, assuming it is the job of other parts of
DOE to manage those efforts.” The budget of the Office of Science is distributed by managers who “generally view
themselves not as technology initiators but as supporters for the actual researchers located in [DOE’s] national labs
and in academia”; the office funds “a wide variety of basic physical science fields, aside from basic energy-related
research.” In some contrast, defense agencies charged with supporting relatively fundamental work, such as the
Office of Naval Research, have remained consistently attentive to the long-term needs of the military; indeed,
part of their job is to understand future needs and ensure an adequate knowledge base will exist when the time
comes. Like their counterparts in DOE, on the other hand, managers in the National Institutes of Health (NIH)
and the Agriculture Department, among other agencies, make their decisions without the sort of guidance DoD
managers get from the mission needs of the services. NIH would look quite different and behave quite differently if
it were charged with developing drugs and treatment regimens (e.g., for underserved Americans such as Medicaid
enrollees) rather than simply supporting research in the biological sciences.
a Estimated fiscal 2011 RDT&E spending comes to some $81 billion. With procurement at $152 billion, acquisition is expected to be $233 billion. Historical Tables: Budget of the
U.S. Government, Fiscal Year 2012 (Washington, DC: Government Printing Office, 2011), table 3.2, p. 74.
b RDT&E Programs (R-1), Department of Defense Budget, Fiscal Year 2012 (Washington, DC: Office of the Under Secretary of Defense (Comptroller), February 2011), p. III.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
6
Defense Department Energy Innovation:
Needs and Capabilities
system. Nuclear propulsion removed those limitations at a stroke,
opening a new era in undersea warfare. On its initial voyage in
1955, the U.S. Navy’s first nuclear submarine, Nautilus, averaged
more than 20 knots over 1,400 miles without surfacing, a speed
diesel-electric submarines could barely reach, much less sustain
for more than a few minutes. Commercial nuclear power followed
in a few years, a spin-off from defense with mixed outcomes,
for reasons explained in our previous study, Innovation Policy for
Climate Change.9 In a further example of spin-off, this one from
aerospace, utilities began in the 1980s to purchase gas turbines
based on military designs for generating electrical power.
Technology flows the other way too, from civilian applications
to the military. If spin-off has flourished in the United States, DoD
has sometimes been blind to spin-on potential. GPS receivers
issued to troops in Afghanistan, for example, weigh 20 times
more than units widely available at lower cost to hunters and
hikers (or terrorists), 2 pounds compared with 5 ounces.10
Our case studies, summarized below, include further
illustrations of energy-related military innovations, and provide
analytical support for the findings and conclusions that follow.
Innovations have many sources, not just R&D. Radical
advances sometimes originate in centrally managed
undertakings, appearing, like the atomic bomb in 1945, in
the public eye full-blown. At least as commonly, they emerge
over many years through repeated incremental innovation, a
pattern illustrated by UAVs. The drones targeting insurgents in
Afghanistan today descend from past generations of remotely
controlled and robotic (autonomous) aircraft beginning nearly
a century ago, at the time of World War I. Earlier drones also
prefigure post–World War II cruise missiles and the precisionguided munitions that, after decades of work, proved their
capabilities in the late stages of the war in Vietnam and then,
during the 1991 Gulf War, delivered video images that illustrated
U.S. military capabilities for a worldwide audience. A great many
development programs and trials, conducted over many years
with generally disappointing results, preceded and contributed
to the first militarily effective UAVs, precision-guided bombs, and
air-to-ground missiles.6
Broadly speaking, then, innovation, military as well as
civilian, is best thought of as an ongoing, cumulative process
fed by multiple inputs rather than as a series of episodic events
stemming from invention, discovery, or research. Most advances
in military technology stem from the acquisition process. But
some originate in on-the-spot responses to enemy tactics: at
least since World War II, the U.S. military has been known for
this sort of “bottom-up” innovation.7 The examples include
such well-known weapons systems as fixed-wing gunships,
which developed out of combat experience in Vietnam.8 All
four services, moreover, spend much money, time, and effort
on the maintenance and repair of quite complex systems and
equipment. Along with feedback from combat experience,
which gave rise to the MRAP vehicle program, feedback from
operations and maintenance has spurred many technical
advances, contributing especially to greater reliability and
reduced operating costs. These are, of course, primary concerns
in energy innovation, since many energy systems are long-lived
and, with traditional sources of energy still relatively inexpensive,
alternatives face challenging cost targets.
Gas Turbines
Independent management of the technology base and of
engine design/development by DoD and its contractors
underlie 60 years of advances in the energy conversion
efficiency of gas turbines and the propulsive efficiency of jet
engines. Separation of the technology base from design and
development became the norm in the 1950s (see box 1.2). It
emerged because the earlier model—in which, to oversimplify
only slightly, new technical knowledge emerged as a byproduct
of design and development—became untenable as a result
of rising complexity. Rather than addressing problems such as
flutter of compressor or turbine blades (uncontrolled vibrations
excited by fluid flow) in the course of engine programs, these
became independent subjects of R&D, the objective being a
body of knowledge that engineers and scientists could tap
regardless of employer.
The general model that has been followed in recent years,
including coordinated undertakings by the Air Force, Navy, and
Army such as the Integrated High Performance Turbine Engine
Technology (IHPTET) program and its successors, could be
adopted for other energy-related technologies. The model is
particularly appropriate for complex systems in which advances
depend on several more-or-less independent fields of technical
knowledge. For example, flow stability within a jet engine
Military Energy Innovation
Since the nineteenth century, energy-related innovations—
railroads for rapid mobilization, steam power at sea in place
of sail, mechanized land armies—have transformed military
operations. Diesel-electric submarines terrorized shipping during
two world wars despite their severe limitations as a weapons
6 Kenneth P. Werrell, The Evolution of the Cruise Missile (Maxwell Air Force Base, AL: Air University Press, September 1985): Paul G. Gillespie, Weapons of Choice: The Development of Precision
Guided Munitions (Tuscaloosa: University of Alabama Press, 2006).
7 James Jay Carafano, GI Ingenuity: Improvisation, Technology, and Winning World War II (Westport, CT: Praeger, 2006).
8 Jack S. Ballard, Development and Employment of Fixed-Wing Gunships, 1962–1972 (Washington, DC: Office of Air Force History, 1982).
9 See especially pp. 15–16.
10 The Modern Warrior’s Combat Load: Dismounted Operations in Afghanistan, April–May 2003 (n.p.: U.S. Army Center for Army Lessons Learned, n.d.), pp. 90, 108.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
7
Defense Department Energy Innovation:
Needs and Capabilities
Box 1.2 Managing R&D
Until the 1950s, the U.S. military made no sharp separation between R&D and procurement. The services specified
what they wanted, whether a new radio or a new fighter plane, passed the requirements along to their arsenals and
supply bureaus or to external contractors, and—if acceptable prototypes eventually came back and the money was
available—placed orders for production quantities. R&D was not unknown (civilians managed research on an ad
hoc basis during World War II, for example), but neither was it routine. That changed quite suddenly as a result of
the Korean War.
Defense spending had fallen precipitously after 1945. There was barely enough money to continue development
of jet aircraft and nuclear weapons. During the early stages of the fighting in Korea, outnumbered U.S. troops
equipped mostly with obsolete weapons were pushed back nearly into the sea. Policymakers concluded that the
United States needed new generations of high-technology weapons, and DoD as an organization—or a congeries of
organizations, since then as now each service did things its own way—had to find ways to acquire those weapons.
Over the decade (1951–1960), RDT&E spending increased sixfold. DoD and the services had to learn to spend the
money effectively. The learning came quickly, as the gas turbine case shows.
As an innovation in policy, or in government management and organization, the separation of generic technology
development from system-specific RDT&E and procurement was not, strictly speaking, new or unique. From the
1920s, the National Advisory Committee for Aeronautics (NACA) conducted technology base work in support
of both military and civil aviation, developing knowledge and methods that aircraft firms could apply in the
design of airframes and powerplants. Yet NACA disappeared in the late 1950s, doomed by a less than exemplary
track record. (Among other failings, NACA had, in a minor irony, neglected propulsion to such an extent that
policymakers cut the agency out of jet engine work during World War II, unwilling to trust it with responsibility
for a vitally important new technology.)a And in a contemporaneous parallel to the organization and management
of gas turbine development, Hyman G. Rickover insisted that the navy’s nuclear submarine program begin with
extensive exploration of conceptual alternatives, followed by painstaking engineering studies and extensive testing
of prototypes, before even beginning to design equipment for submarine installation.b This was a major reason
for the triumphant and trouble-free debut of Nautilus, so different from recent cases such as the San Antonio
class of diesel-powered amphibious transport dock ships, the first of which “has been beset by major defects since
its builder, Northrop Grumman, delivered the ship to the Navy in 2005.”c In his white paper, “The Dynamics of
Military Innovation and the Prospects for Defense-Led Energy Innovation,” Eugene Gholz traces the $18 billion
program’s difficulties to a misguided belief by Pentagon managers that the prime contractor, with experience in
systems integration but not in the design and construction of naval vessels, could adapt its “core competencies”
to shipbuilding.
a Virginia P. Dawson, Engines and Innovation: Lewis Laboratory and American Propulsion Technology, NASA SP-4306 (Washington, DC: National Aeronautics and Space
Administration, 1991).
b Richard G. Hewlett and Francis Duncan, Nuclear Navy, 1946–1962 (Chicago: University of Chicago Press, 1974).
c Corinne Reilly, “Navy Says Trouble-Plagued San Antonio is Ready,” [Norfolk] Virginian-Pilot, August 4, 2011. As this account relates, the San Antonio experienced a “disastrous
maiden deployment in 2008,” and in July 2011, after extensive repairs, it encountered its “latest troubles—leaks in all four engines…off the coast of Virginia.” Another
deployment has been scheduled for 2012. The very fact that the Navy delayed a second deployment by four years in the effort to rectify the San Antonio’s shortcomings testifies
both to the pathologies of acquisition, which are manifold, and the need to work through technical problems in military systems and equipment no matter how long it may take.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
8
Defense Department Energy Innovation:
Needs and Capabilities
If policymakers nonetheless decide to support production,
the choice should be biofuels rather than coal-based synfuels.
Whether burned directly or converted to gas or liquid, coal releases
substantially more carbon dioxide (CO2) to the atmosphere than
other fossil fuels—unless it is captured and sequestered (e.g.,
in stable underground reservoirs). Only with a determined and
complementary commitment to developing systems to capture
and sequester the CO2, would there be much point in planning
for synfuels production, even though the technology is in hand.
Biofuels pathways have only recently begun to be explored, except
for alcohols and biodiesel, which are unsustainable in the United
States in large production volumes, but have at least theoretical
potential to replace petroleum without adding to the atmospheric
GHG burden. Since climate change could bring new risks to
international security, it would make little sense for DoD to begin
purchasing synfuels.
The Air Force and Navy have nonetheless set ambitious
goals for future purchases of alternative fuels, in the expectation
that announcing such plans will induce innovation and private
investment in production capacity. These hopes will probably
be frustrated, unless DoD agrees to pay well in excess of prices
set in the international petroleum market, a commitment
that would almost certainly incite opposition from the oil
industry and Congress and one that investors might not find
credible. Such a policy could also lead to premature efforts to
commercialize technologies that later prove unsustainable or
simply uncompetitive.
depends on the elastic response of vanes (some fixed and others
moving) to dynamic pressures exerted by those same flows.
Blade flutter results from similar interactions. The implication for
policy is that disciplinary research, critical as it may be for energyclimate innovation, should be complemented, as in IHPTET, by
multidisciplinary systems-oriented programs with engineering
design/analysis components.
Effective management of gas turbine development reflects
military demand for both performance and dependability. Critics
sometimes suggested that IHPTET was overly coordinated to the
point of rigidity, to the detriment of fresh thinking, and IHPTET
follow-ons have been organized and managed in looser, less
structured fashion.
Alternative Fuels
Liquid fuels are indispensable for the U.S. military. Nuclear
reactors power submarines and aircraft carriers; otherwise
the Navy’s ships run on petroleum. So do all types of aircraft,
trucks, and combat vehicles. Military installations buy electrical
power, when they can, from local utilities, but diesel generators
provide essential backup—and are the main power source at
forward bases that lack grid connections. Direct consumption
of petroleum accounted for more than three-quarters of DoD’s
energy use in fiscal 2010, costing $13.4 billion.11
Even so, given adequate forward planning, DoD has little
reason to fear constraints on supply of petroleum-based fuels
for several decades, perhaps many. A tightening international
oil market, resulting in continuing price increases, would pose
greater difficulties for other segments of the U.S. economy and
society, and for other countries. DoD’s expenditures on fuel may
seem large, but should be viewed in the context of other routine
expenditures. Even for the Air Force, the principal consumer with
its fleet of nearly 6,000 planes, fuel accounts for only around
one-fifth of operations and maintenance costs.12 In Afghanistan
and Iraq, fuel and water have made up 70 percent (by weight) of
the supplies delivered to forward areas.13 Transport convoys have
drawn frequent and deadly attacks, but the only way to reduce
risks, casualties, and delivery costs is to cut consumption (of
water as well as fuel)—not something that alternative fuels can
promise. Alternative fuels might have somewhat lower energy
densities than petroleum (less energy content per gallon or per
pound), meaning somewhat more fuel would have to be burned
for the same power output, but not higher (by any significant
amount). Indeed, alternative fuels cannot promise performance
advantages of any sort.
Lighter Loads for Soldiers
Batteries make up a substantial portion of the 100 pounds or
more carried by soldiers afoot. Commercial demand has driven
battery innovation in recent decades, but consumer markets are
much more price sensitive than DoD, and not many customers
will pay for the absolute lightest weight. As a result, military and
commercial markets have diverged, with DoD buying many
types of specialized nonrechargeable batteries for soldierportable equipment, since these weigh about half as much as
the rechargeable batteries found in mobile telephones, laptop
computers, and cordless drills. Even if substantially lighter
rechargeable batteries become available, soldiers will often
find themselves far from electrical outlets; while rechargers
powered by solar cells, wind, and fuel cells have begun to reach
the field, most electrical power at forward bases comes from
diesel generators. Since the military market is small, and since
weight will remain the priority—indeed, the Army and Marine
Corps hope to reduce by half the loads carried by foot soldiers—
11 Defense Logistics Agency Energy Fact Book Fiscal Year 2010 (Fort Belvoir, VA: Defense Logistics Agency Energy, 2011).
12 Eric J. Unger, An Examination of the Relationship between Usage and Operating-and-Support Costs of U.S. Air Force Aircraft, TR594 (Santa Monica, CA: RAND, 2009), table 1.2, p. 3.
13 Defense Management: DOD Needs to Increase Attention on Fuel Demand Management at Forward-Deployed Locations, GAO-09-300 (Washington, DC: Government Accountability Office,
February 2009), p. 8.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
9
Defense Department Energy Innovation:
Needs and Capabilities
continued innovation in batteries for consumer products may
hold promise primarily for training applications and for powering
vehicle-born equipment.
There is a second way the Army and Marine Corps can
reduce the weight soldiers must carry: cut the amount of power
consumed by equipment, such as radios, through application of
well-known design practices pioneered in commercial markets.
DoD contractors appear to make little use of such methods
currently, probably because acquisition policies and practices
do not create incentives to do so. Without higher priorities for
low-power design, soldiers could end up carrying even more
than they do today, if battery-powered systems and equipment
(e.g., portable robots) proliferate faster than the energy density of
batteries increases.
Energy and the Military Mission
Generalizations from the Case Studies
The separation and largely independent management of
research and system design set DoD apart from other federal
R&D agencies. Many agencies provide broad funding for science
and technology. DoD supports the design and development of
systems that it expects to purchase and upon which it directly
depends for fulfilling its mission. The national security mission
acts as a source of managerial discipline somewhat analogous to
profitability in corporate organizations, yet it is also something
of a two-edged sword. “National security” has been used to
justify technological overreach, including efforts to exploit
new technologies before they have been demonstrated, and a
preference for unworkable superweapons. The Army’s recently
aborted Future Combat System (FCS), “restructured” in 2009
and then canceled completely, is the latest example, one that
absorbed $20 billion in RDT&E expenditures.
Incentives do exist for DoD to match technology
development with actual military needs. They may not always
be strong enough, as suggested by the Army’s failure to
pursue low-power electronics (and the lagging pace of diesel
generator modernization, discussed in a later section). The same
imperatives that underlay the ill-fated FCS program have led to
simple yet revolutionary weapons such as laser-guided bombs.
Our case studies also suggest that advances in engineering
knowledge tend to matter more than advances in scientific
knowledge for system performance and for costs. Costs, in
particular, fall under the purview of engineering, and while for
DoD cost matters less relative to performance than it does for
commercial customers, it usually has at least some bearing. Other
research agencies for the most part do not directly confront such
issues, because they are rarely involved in the demonstration,
purchase, and mission-critical deployment of products derived
from their research.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
When they could, militaries have treated fuel—aviation gasoline
or jet fuel for planes, diesel fuel for armored vehicles, bunker fuel
for ships—as an overhead item. Commanders expected to be
supplied with whatever they needed and more; waste is part of
war, and to want for fuel was to risk disaster almost as assuredly
as to want for ammunition. The alternative might be destroyers
forced to steam at half-speed or Patton’s army stalled in France
in 1944 after outrunning its fuel convoys. Military professionals
also recognize that a desire for assured supplies of oil was among
the reasons, or pretexts, for the wars started by Nazi Germany
and Imperial Japan, and, further, that greenhouse gas–driven
warming could, in some speculative scenarios, spark conflicts in
which the United States might be called upon to intervene. (To
be sure, serious analysis of possible linkages between climate
change and national security has hardly begun.)
DoD Energy Consumption
To the extent that past policies gave priority to supplying
war fighters with as much fuel as they could use—and some
historians argue that logistics, even more than the production
feats of American industry, won World War II—an explicit focus
on reducing energy use would represent a genuine shift. Should
efforts to save energy imply even a small sacrifice in performance
on measures deemed critical for military effectiveness, the
services may resist. On the other hand, there are good reasons,
readily available means, and no apparent downside to reducing
energy consumption on DoD’s fixed bases.
Facilities and Infrastructure
The American military’s 500-plus bases, depots, and other real
estate holdings in the United States and abroad, mostly well
removed from zones of conflict and some of them resembling
small cities, get their energy—electricity, natural gas, gasoline
for passenger vehicles—chiefly from commercial suppliers.
Among energy sources, electrical power is critical. DoD depends
on computer and communications networks numbering in
the thousands. Most rely on civilian infrastructure for electrical
power and voice/data links. So long as backup power is available
(e.g., from diesel generators), essential communications and
other C4ISR (Command, Control, Communication, Computers,
Intelligence, Surveillance, and Reconnaissance), functions can be
maintained. Smart-grid technologies that automatically isolate
and reconfigure DoD’s most critical networks during blackouts
and other emergencies have been of particular interest to those
who oversee the military’s energy infrastructure.
Other fixed-base energy concerns emphasize costs and
conservation. DoD’s stock of buildings numbers over 300,000.
10
Defense Department Energy Innovation:
Needs and Capabilities
As discussed by Jeffrey Marqusee in his white paper, “Military
Installations and Energy Technology Innovation,” DoD expects to
substantially reduce facilities, energy demand, in part by acting
as an innovation test bed, identifying the best new technologies,
and accelerating adoption. Important as these efforts may be,
they affect only about one-quarter of DoD energy usage. The rest
is consumed in operations, mostly by what DoD calls platforms—
ships, aircraft, and ground vehicles.
DoD’s Energy Dilemma: Fuel Consumption
vs. Platform Performance
Military planners distinguish platforms from the weapons they
carry. The Navy’s new Littoral Combat Ship (LCS), for example,
accommodates interchangeable weapon modules for mine,
anti-submarine, and surface warfare. For systems including
aircraft, armored vehicles, and the LCS, effectiveness in engaging
or evading the enemy depends on platform performance—e.g.,
range, speed, maneuverability, and carrying capacity for troops
and weapons. A fully loaded B-52 weighs nearly 500,000 pounds,
about half of this the fuel, some 70,000 gallons, to transport the
crew plus 10,000 pounds of bombs or other weapons on an
8,000-mile flight. Smaller attack planes can carry many of the
same weapons and conduct generally similar missions, but have
ranges of less than 1,000 miles; and although air-to-air refueling
is routine, tankers are a limited resource. For ground vehicles,
protective armor adds weight, requiring more powerful engines
to maintain performance as measured by speed and acceleration.
More weight and power mean greater fuel consumption.
System design is a matter of trade-offs, and DoD must
compromise, as do airlines in buying planes, and consumers in
deciding whether to buy a pickup truck from Chevrolet or a Volt,
or a Corvette. In choosing a gas turbine engine for its M1 Abrams
main battle tank, the Army opted for a power-to-weight ratio
much superior to the traditional diesel engine, at the sacrifice
of fuel efficiency. Indeed, the Abrams burns so much fuel—as
much as two gallons per mile—that U.S. armored columns
sometimes had to slow or even stop during the 1991 Gulf War
to avoid outrunning the accompanying fuel trucks. (Pentagon
planners, well aware of the fuel mileage figures, overestimated
the capabilities of Iraqi forces and anticipated a slower pace of
U.S. advance.) Ever since, the Army has discussed re-engining
the Abrams with a more efficient powerplant. No action has
followed, in part because of multibillion-dollar costs. But the
case shows how mission-critical and energy-saving goals may
be complementary.
While the 70-ton Abrams is essentially invulnerable to the
improvised explosive devices (IEDs) and rocket-propelled
grenades (RPGs) responsible for so many casualties in Iraq and
Afghanistan, it is too big and cumbersome for conditions in most
parts of these countries. Experience with the vehicles that have
been used in these conflicts—Humvees, MRAPs, and Strykers—
suggests that no matter the rhetorical emphasis DoD may put
on energy saving, future generations of ground vehicles will
probably weigh more, and thus burn more fuel, than current
models. The original Humvee, unarmored and never intended
for combat, weighed about two and a half tons; add-on armor
kits bring that to as much as four and a half tons, depending
on level of protection. (By themselves, the four-inch-thick
bulletproof windows that replace a standard Humvee’s vinyl side
curtains weigh as much as two soldiers.14) Since a 10 percent
rise in weight increases fuel consumption by about 7 percent
(depending on operating cycle), up-armored Humvees burn
more trucked-in fuel. With more weight than the chassis and
running gear were designed for, they need more maintenance
and wear out more quickly. Strykers, armored originally against
heavy machine gun fire, weigh about 19 tons; add-on armor for
protection against RPGs (but not IEDs, which produce an upward
blast) raises that by two and a half tons (for slat armor) or four
and a half tons (for reactive armor, which explodes outwards to
destroy projectiles before they can penetrate the hull). When
up-armored Humvees and Strykers fell prey to more powerful
IEDs, DoD began an intensive program to acquire the MRAP, a
family of vehicles with no standard design, and built by a number
of vendors. The heaviest MRAPs weigh nearly 30 tons. Bigger,
heavier vehicles consume more fuel directly and also indirectly,
when transported to battle zones by truck, rail, ship, or air. A fully
fueled C-130H cargo plane, for example, can haul 18 tons 1,000
miles; range drops in half with 20 tons on board, meaning that
it takes two trips (or two C-130s) to move a single Stryker with
armor kit a few hundred miles.15
Next-generation vehicles will probably weigh more and
consume more fuel, despite advances in lightweight protective
armor (ceramics, composites, and reactive systems). Armor
must shield large areas; projectiles need only punch through
in one spot. Large area protection inevitably adds considerable
weight; vehicle size must increase to maintain interior volume;
and maintaining performance as weight increases means extra
horsepower. Fuel consumption rises, driven in this case by the
IED threat that surfaced in Iraq and will not now be uninvented.
Some observers have suggested that the Army’s proposed new
14 Opportunities in Protection Materials Science and Technology for Future Army Applications (Washington, DC: National Academies Press, 2011), p. 80.
15 Military Transportation: Fielding of Army’s Stryker Vehicles Is Well Under Way, but Expectations for Their Transportability by C-130 Aircraft Need to Be Clarified, GAO-04-925 (Washington, DC:
Government Accountability Office, August 2004), p. 23.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
11
Defense Department Energy Innovation:
Needs and Capabilities
troop carrier, currently designated the Ground Combat Vehicle,
could end up weighing twice as much as the Bradley fighting
vehicle it would replace, or almost as much as an Abrams tank.16
Powerplant innovations can slow the rate at which fuel
consumption rises with weight, but cannot promise to reverse
it. Military vehicles, with few exceptions (e.g., small wheeled
robots) are too big and heavy to be candidates for batteryelectric power. Hybrid powertrains may find application,
and auxiliary power units (APUs) would provide near-term
reductions in fuel consumption, since military vehicles spend
a good deal of time moving slowly or idling (e.g., guarding
intersections). Efficiency drops precipitously with output in any
fuel-burning engine—to zero at idle, absent housekeeping
loads for radios and heating or air conditioning. With an APU
sized to operate efficiently at such loads, the main engine can
shut down until needed. With a hybrid powertrain, the main
engine can be downsized so that it operates, on average,
at greater efficiency. For a military vehicle, unfortunately,
that would mean sacrificing speed and acceleration needed
in combat. (Passenger cars, unlike military vehicles, have
substantial excess power and in most cases governed top
speeds of something over 100 mph.) Navy ships with two
or more engines, on the other hand, can size or supplement
engines (including with batteries) to maximize efficiency.
Armored vehicles provide a telling illustration of DoD’s
energy dilemma. The general point holds for other platforms:
greater performance—faster warships, helicopters that can
get off the ground at high altitudes (as in the mountains of
Afghanistan)—means greater energy consumption. Innovations
that make possible greater efficiency can, alternatively, be turned
to yield gains on other performance measures, which the armed
forces may prefer, just as automakers have chosen to exploit
new technological advances to raise horsepower levels rather
than vehicle miles-per-gallon (which have not changed much
since the early 1990s). Those trade-offs do not exist for diesel
generators, but even then lengthy acquisition cycles postpone
the gains for years. Thus, while the result may not be reduced
energy consumption, there is nonetheless an operational
rationale for improved efficiency of military powertrains, and this
could provide spillover benefits in other sectors.
DoD’s Modernization Dilemma: Moving Innovations through
the Acquisition System
In the 2009 Defense Authorization Act, Congress instructed
16
17
18
19
20
21
DoD to consider the fully burdened costs of energy in future
acquisition decisions (i.e., life-cycle costs attributable to energy
consumption). As yet, no information on fully burdened energy
costs calculated under DoD’s implementing regulations appears
to be publicly available. More to the point, acquisition programs
take years to complete, and systems then remain in service for
decades. The major programs under way today will dominate
DoD energy consumption for the next half century. These
programs, such as the F-35 Joint Strike Fighter, reflect decisions
made when DoD considered energy consumption primarily
as it affected platform range (and carbon footprint was of no
concern at all). The F-35 program began in the mid-1990s, when
oil sold for around $20 per barrel; low-rate production began in
2005, testing and engineering development will continue until
at least 2018, and current plans call for cumulative deliveries of
2,456 aircraft through 2035. Ongoing incremental changes to the
F-35’s engine, airframe, and flight controls will at best reduce fuel
consumption a little.
Major systems invariably cost too much for frequent
replacement, and consequently remain in service for lengthy
periods. Acquisition costs for the F-35, DoD’s most expensive
program, are expected to exceed $385 billion.17 Each Littoral
Combat Ship, exclusive of weapons modules, will cost some
$500 million (in 2011 dollars); the Navy hopes to buy 55.18 DoD
has purchased nearly 28,000 MRAPs for some $44 billion.19
Modifications or retrofitting to reduce the energy consumption
of existing systems, while frequently suggested, has almost
always been rejected as too costly, as for the Abrams. For the
B-52, designed in the early 1950s and still an Air Force mainstay,
“numerous re-engining studies over the years (at least nine
studies since 1984)” have reached the same conclusion: almost
regardless of future oil prices, total costs will rise.
Although the F-35’s 40-year acquisition cycle is extreme,
even low-cost, straightforward programs take so long to
complete that equipment may be obsolete by the time it
reaches the field. More than four-fifths of the 125,000 diesel
generators in DoD’s inventory are decades old, based on
designs laid down in the 1960s.20 They burn more fuel than
up-to-date equipment—in Iraq and Afghanistan consuming
greater quantities than armored vehicles, helicopters, or trucks
(including transport convoys that haul in the fuel)—and make
more noise, which can alert the enemy.21
The Army began work on a family of five new generators
(with capacities ranging from 5 to 60 kilowatts) in the late 1990s.
Sydney J. Freedberg, Jr., “Army Tries Again For A New Tank,” National Journal (online), March 21, 2011.
Joint Strike Fighter: Restructuring Places Program on Firmer Footing but Progress is Still Lagging, GAO-11-677t (Washington, DC: Government Accountability Office, May 2011).
An Analysis of the Navy’s Fiscal Year 2012 Shipbuilding (Washington, DC: Congressional Budget Office, June 2011), table 3, p. 15.
Warfighter Support: Improved Cost Analysis and Better Oversight Needed over Army Nonstandard Equipment, GAO-11-766 (Washington, DC: Government Accountability Office, September 2011).
Thomas D. Crowley, et al., Transforming the Way DoD Looks at Energy, Report FT602T1 (n.p.: LMI Government Consulting, April 2007), p. E-28.
Report of the Defense Science Board Task Force on DOD Energy Strategy: “More Fight—Less Fuel” (Washington, DC: Office of the Under Secretary of Defense For Acquisition, Technology, and
Logistics, February 2008), p. 44.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
12
Defense Department Energy Innovation:
Needs and Capabilities
Pilot production of the first of these Advanced Medium Mobile
Power Sources (AMMPS) units began in 2011.22 Once they are in
full production, DoD plans to buy several thousand of the several
AMMPS models each year, an annual total of around 10,000.
AMMPS generators burn perhaps 20 percent less fuel, depending
on the model, than units purchased under the preceding Tactical
Quiet Generator (TQG) program, which themselves perform
better than the 1960s-era generators that still account for most
of DoD’s inventory. Production of TQG generators began in the
early 1990s, and procurement of some models will continue until
2015 or beyond. It may take almost as long, two or three decades,
to turn over DoD’s inventory of diesel-powered generators as it
will to replace existing Air Force, Navy, and Marine Corps fighters
with the futuristic F-35. The point is simple enough: shorter
acquisition cycles may be highly desirable, but repeated efforts
at reform since the 1960s have accomplished little; to cut energy
consumption over the next two or three decades, the services
have no real choice but to change their operating practices.
Reducing Operational Energy Consumption
There are straightforward ways to save fuel, and the services
have begun to exploit them. Diesel generators networked
via rudimentary “smart grids” reduce fuel consumption; some
generators can be shut down, with those remaining online
running more efficiently.23 Much more can be accomplished.
Private companies—airlines, ocean shippers, package delivery
firms—routinely manage their fleets to minimize operating
expenses, which for many are dominated by fuel costs. Dynamic
scheduling keeps trucks as full as possible. Airlines cannot vary
their schedules so easily; instead, they juggle fares constantly,
offering tens of thousands of permutations via methods known
as dynamic pricing to try to put a paying passenger in every
seat. Operations centers oversee route adjustments based on
weather and traffic to minimize fuel burn (in passenger and cargo
planes, unfortunately, an obsolete air traffic control system limits
flexibility).
DoD, with over 600 information systems just for logistics,
employs similar planning, routing, and scheduling methods. Navy
ships transit at relatively slow speeds to conserve fuel (reducing
speed from 25 knots to 17–18 knots cuts fuel consumption
roughly by half ) and the Air Force ferries planes on fuel-saving
routes. Even so, the private sector, motivated by profits, appears
to save energy more consistently and aggressively. According
to one recent account, for example, “While Mission Index Flying
is new for [Air Mobility Command], it isn’t a new concept. Cost
22
23
24
25
26
Index Flying (the commercial equivalent of Mission Index Flying)
has helped airlines manage bottom lines for over a quarter of
a century.” 24
This could be taken as a case of spin-off followed by later
spin-on, since the general family of methods in use for saving
fuel, given the name operations research (OR) during World
War II, and sometimes called operations analysis (a label that fits
actual practices better), stems largely from military planning,
with management antecedents in industrial management. As
powerful computers became available for the extensive repetitive
calculations on which the new methods depended, postwar
applications exploded. Defense planners, for example, explored
scenarios for deterring, or fighting, what many feared would be
World War III. They asked questions such as where the Strategic
Air Command’s bombers should be based, how many targets
in the Soviet Union they could reach, and how many tankers
the Air Force would have to buy for air-to-air refueling. DoD and
its contractors have a great deal of accumulated experience in
methods that could now be turned to saving energy.
The Pentagon’s new office for Operational Energy Plans
and Programs, established under the 2009 National Defense
Authorization Act to oversee energy savings on a departmentwide basis, has called on the services to formulate “a clear
understanding of how energy is being consumed at the point
of use” as a basis for “well informed resourcing decisions.” 24
Important as it will be to gather accurate and comprehensive
baseline planning information, it should be plain that there is
no need to wait for better data. Part of the purpose of OR and
related methods is to improve decision making with data and
information that may be incomplete, inaccurate, or otherwise
unreliable. Where DoD has not already begun to do so, it
should employ the available tools. There is no better way for
the U.S. military to save energy and set an example for the rest
of government.
Conclusion: Policy Principles
In our previous study, we laid out four principles for guiding
federal energy innovation policies:26
1) Because innovation as a process is complex, as are energy
markets and the energy system, policy should foster diversity
and competition in both technologies and institutional settings.
2) Given the limitations imposed by basic physics on energy
conversion, and the unpredictability of breakthroughs, policy
should emphasize ongoing incremental innovation, rapid
diffusion, and continuous learning.
See the Web site of the Mobile Electric Power program, www.pm-mep.army.mil.
Annie Snider, “Basic Minigrids Promise Major Fuel Savings in Afghanistan,” New York Times, September 30, 2011.
Capt. Kathleen Ferrero, “C-17 Crews First to Use New In-Flight Program to Save Fuel,” Air Force Print News Today, July 8, 2011.
Fiscal Year 2012 Operational Energy Budget Certification Report (Washington, DC: Assistant Secretary of Defense for Operational Energy Plans and Programs, January 2011), p. 6.
Innovation Policy for Climate Change, pp. 2–3 and 37–38.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
13
Defense Department Energy Innovation:
Needs and Capabilities
3) Because a decarbonized energy system is a public good,
like clean air or national defense, government should
call on a broad portfolio of measures, not just research,
seeking widespread applications and subsequent feedbackdriven learning.
and have learned to integrate these elements effectively
into their innovation systems. And DoD also understands
the necessity of combining disciplinary research efforts
with multidisciplinary systems-oriented programs having
engineering design/analysis components.
4) Because different technologies at different stages in
development respond to different policies, the portfolio
should put greater emphasis on testing, demonstration, and
procurement, which have not been used very effectively to
foster energy-climate innovation.
4) Because national security is subject to varying interpretations,
shifting over time, it is not inconceivable that DoD could be
given a somewhat broader role in energy innovation, viewed
as a public good and consistent with its mission. But the
more important and immediate point for our purposes is that
when the energy innovation needs of the armed forces align
with those in the civilian economy, as they often do, DoD
and its contractors can bring to bear competencies in testing,
demonstration, and procurement that are rare in other parts
of government.
The current project’s findings furthers these principles, and
expands upon them:
1) Defense agencies and DOE (and its ancestor, the Atomic
Energy Commission) have done a great deal already to
advance energy technologies, pioneering nuclear reactors for
submarine propulsion, with subsequent commercial spin-offs,
and spurring increases in gas turbine efficiency. Continuing
competition and cooperation between DoD and DOE should
be encouraged.
2) DoD is unique among federal agencies in the degree to
which it houses supply and demand for innovation under
one institutional roof. Smart-grid technology and energy test
beds, with the promise of substantial procurements to follow,
show the promise and power of these features of the DoD
innovation system.
3) DoD and its contractors have much experience in bringing
together multiple innovations, major and minor, leading
to system-level performance advances. Defense agencies
understand, better than other parts of government, that
technical advances in combination, rather than isolated
breakthroughs, lead to big gains in realized performance.
Defense agencies also understand that advances in
engineering knowledge tend to matter more for system costs
and performance than advances in scientific knowledge,
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
DoD contributions to energy innovation must reflect DoD’s
mission needs. Otherwise the incentives will be too weak. As
Bonvillian and Van Atta note in their white paper, the Air Force,
led by pilots, was slow to embrace pilotless UAVs—yet the
operational logic of UAV’s has proven too strong to resist. The
lesson for energy-climate innovation is straightforward: missioncritical technologies will get commitment and support; others
may not.
At the same time, DoD and the services arguably are still
searching for a sense of the roles and missions they will be
asked to undertake in the future. The challenges encountered
in Iraq and Afghanistan—irregular warfare; long supply chains
passing through mountainous terrain that hosts and hides hostile
forces; few allies, some only feebly supportive—may or may not
feature in future conflicts. Energy will always be vital for national
security, and much of the innovation potential lies with low- and
zero-carbon sources; that in itself should be reason enough to
integrate DoD and the services more fully and effectively into the
national energy-climate innovation effort.
14
Defense Department Energy Innovation:
Needs and Capabilities
1
Defense Department Energy
Innovation: Three Cases
John Alic
The Department of Defense (DoD) accounts for four-fifths
of federal government energy consumption (80.3 percent in
2010), followed at a great distance by the Postal Service (3.8
percent).27 The case studies that follow deal with jet engines and
gas turbines, alternatives to petroleum-based fuels, and soldierportable power sources, chiefly batteries. The cases are brief,
intended to illustrate patterns of defense-related innovation
and government policies and practices. The heavily historical
gas turbine case comes first to show how DoD adapted to
growing technological complexity in the 1950s by splitting
R&D (or RDT&E, for research, development, test, and evaluation)
from procurement and, within the RDT&E portfolio, by splitting
support for relatively generic knowledge development (e.g.,
compressible flow in rotating machinery, a core problem
in design of gas turbines) from design and development of
particular systems (e.g., the J-57 engine chosen to power the
B-52 bomber).
Case 1: Gas Turbines and Jet Engines
Military Demand: Driving Force for Innovation
In 1948, six years after the first flight of an American-built jet
plane, Secretary of Defense James V. Forrestal told Congress that
“the fuel consumption of a jet Air Force was approximately fortyfive times that of a traditional air force.”28 Forrestal’s warning was
prompted by the abysmal fuel efficiency of early gas turbines
compared with the piston engines they had begun to replace.
In the 1930s, manufacturers of aircraft piston engines devoted
much effort to meeting the demands of the Army Air Corps
and the Navy for range and endurance along with the demands
of fledgling commercial airlines for reliability in passenger
service. The Navy wanted patrol planes to scout for elusive
enemies hiding in the trackless ocean. The Army, after suffering
unsustainable losses of B-17s and B-24s over Europe in 1943,
had to find some means to extend the range of escort fighters
such as the P-51. By the end of the war, P-51s equipped with
powerful yet efficient engines and disposable drop tanks could
manage a round-trip of nearly 2,000 miles. Yet when the Korean
War broke out in 1950, jet-propelled F-80s based in Japan, with
a range of only about 200 miles, could barely make it to the
Korean peninsula.29
These imperatives remain. Navy F/A-18s flying from carriers in
the Red Sea and Persian Gulf, with less range than Air Force attack
planes, could not accomplish much in the 1991 Persian Gulf
War.30 Unlike the F-80, with its first-generation jet engine, the F/A18’s range limitations were the result of deliberate choice to trade
fuel load for payload. Indeed, the F/A-18’s engines are far more
efficient than anyone in the 1940s could have anticipated: by the
1980s, gas turbine fuel consumption had improved to the point
that electrical utilities were buying them to meet peak power
demand—an application that would have seemed irresponsibly
wasteful when the jet engine was young and Secretary Forrestal
delivered the remarks quoted above.
27 Annual Energy Review 2010, DOE/EIA-0384 (2010) (Washington, DC: Energy Information Administration, October 2011), table 1.11, p. 25.
28 Quoted in Paolo E. Coletta, The United States Navy and Defense Unification, 1947–1953 (Newark: University of Delaware Press, 1981), p. 69.
29 The F-80’s range could also be extended with drop tanks (although that meant stripping bombs meant for ground attack, which World War II escort fighters had not needed) and in an
example of the bottom-up innovation for which the U.S. military has been known, two Air Force lieutenants improvised a way to increase their volume. Marcelle Size Knaack, Encyclopedia
of U.S. Air Force Aircraft and Missile Systems, Volume 1: Post–World War II Fighters, 1945–1973 (Washington, DC: Office of Air Force History, 1978), p. 9. The Air Force gained its independence
from the Army in 1947.
30 Thomas A. Keaney and Eliot A. Cohen, Gulf War Air Power Survey: Summary Report (Washington, DC: U.S. Government Printing Office, 1993), pp. 201–203 and 228.
Department
of defense
ENERGY INNOVATION
at the DEPARTMENT of DEFENSE:
Energy
Project
ASSESSING
the OPPORTUNITIES
15
Defense Department Energy
Innovation: Three Cases
FIGURE
Figure 2-1 shows the rate of advance over several decades.
At first, engine manufacturers had trouble just designing and
building a gas turbine that would start and run, much less
produce useful power. (Without power in excess of that needed
to drive the compressor, efficiency is identically zero.) Spurred by
military demand and military funding, efficiency—useful output
divided by energy input—increased and fuel consumption
declined. By the 1960s, the dollars were coming from the Army,
as well as the Air Force and Navy, for helicopters and the gas
turbine–powered Abrams main battle tank.
2.1
Technological and Policy Evolution
Efficiency Gains in U.S. Military Gas Turbines
1.3
1.2
Specific Fuel Consumption
( lb-fuel / lb-thrust / hour )
1.1
1.0
0.9
Turbojet Engines
0.8
0.7
0.6
0.5
Turbofan Engines
0.4
0.3
1940
1945
1950
1955
1960
1965
1970
1975
1980
Year of Introduction
Notes. Thrust-specific fuel consumption (vertical axis) at rated military power (without
afterburning). Turbofans, or fan jets, bypass some air around the core of the engine, increasing
the efficiency with which thrust is generated, hence the thrust-specific fuel consumption
(the quantity plotted); thermal efficiency (the parameter of interest for applications other
than jet propulsion) does not change. Dates on the horizontal axis correspond to the end of
development and testing and beginning of low-rate production. They are approximate to the
nearest year. Over the first two decades especially, production commonly began well before
the completion of development, with design modifications continuing to resolve stubborn
technical difficulties.
Sources. J. L. Birkler, J. B. Garfinkle, and K. E. Marks, Development and Production Cost Estimating
Relationships for Aircraft Turbine Engines, N-1882-AF (Santa Monica, CA: RAND, October
1982), table 1, p. 7; James St. Peter, The History of Aircraft Gas Turbine Engine Development in
the United States: A Tradition of Excellence (Atlanta, GA: International Gas Turbine Institute of
the American Society of Mechanical Engineers, 1999); Obaid Younossi, Mark. V. Arena, Richard
M. Moore, Mark Lorell, Joanna Mason, and John C. Graser, Military Jet Engine Acquisition:
Technology Basics and Cost-Estimating Methodology, MR-1596 (Santa Monica, CA: RAND, 2002),
table 6.2, pp. 66–68.
The Air Force and Navy began many new engine programs
during the 1950s, and many of these programs encountered
serious technical difficulties.31 “Before the 1960s, research into
[jet] engine phenomena in the United States was generally
carried out in the context of engine procurement programs.
Requirements for the engine were established, and technology
development was part of the process of designing a new
engine.”32 Some prototype powerplants would not run at all.
Others suffered from inexplicable combustion instabilities or
mechanical vibrations. Compressors surged and stalled, creating
chronic problems into the 1970s for fighter planes during violent
maneuvers that distorted inlet air flows. These were no trivial
issues. A test pilot writing in 1955 noted that “stalls may occur at
any combination of altitude, power setting and flight condition…
Once compressor stall commences, the pilot has little or no
choice except to break off any attack and regain control of the
engine by all means at his disposal.”33
Pentagon managers realized that none of their contractors
had the knowledge and skills necessary to move from design
through development into testing and production in moreor-less smooth and predictable fashion. During World War II,
policymakers had chosen General Electric (GE), a pioneer in
industrial research with aircraft engine experience limited to
componentry, chiefly turbochargers, to work on jet propulsion
(based on British technology) in part because of the firm’s
broad-based R&D capability. Despite its technological prowess,
GE struggled in the 1950s alongside Pratt & Whitney and other
old-line engine manufacturers to master a series of technical
puzzles new and different from any in their collective experience.
This was the stimulus that led Pentagon managers to decouple
technology-base R&D from powerplant design and development.
Analytical methods for designing compressors and turbines
originated in the slide rule era and incorporated gross simplifying
assumptions for tractability. Machinery when built did not
behave as predicted. Nor could available analytical methods
provide much guidance on what to change. The difficulties
encountered with a particular engine design might be overcome,
but all too often the engineering group, in the absence of
insight based on physical understanding, had no choice but to
proceed by trial and error. Research was the necessary route to
findings that could be generalized. “Experience with an engine
directed attention to earlier theoretical work and stimulated
the revision in more modern terms.”34 DoD supplied much of
31 James St. Peter, The History of Aircraft Gas Turbine Engine Development in the United States: A Tradition of Excellence (Atlanta, GA: International Gas Turbine Institute of the American Society
of Mechanical Engineers, 1999) summarizes the development histories of major engine designs by all active manufacturers.
32 William S. Hong and Paul D. Collopy, “Technology for Jet Engines: Case Study in Science and Technology Development,” Journal of Propulsion and Power 21, no. 5 (September-October
2005): 769.
33 T. A. Marschak, The Role of Project Histories in the Study of R&D, P-2850 (Santa Monica, CA: RAND, January 1964), p. 60, excerpting from an Air Force flight test report on North American’s
F-100A, the first series-production supersonic fighter, fitted with a Pratt & Whitney J-57 engine.
34 William Rede Hawthorne, “Some Aerodynamic Problems of Aircraft Engines,” Journal of the Aeronautical Sciences 24, no. 10 (1957): 717.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
16
Defense Department Energy
Innovation: Three Cases
the funding that supported these “revisions” in theory and
methods. The work went on primarily in industry. As for other
systemically complex technologies, it was mostly firms with
well-defined needs for technical knowledge—needs that
reflected DoD requirements—that had the incentives and
competencies essential for driving innovation on a broad front.
Suppliers and the military’s own laboratories worked with
engine manufacturers. Then as now, only a handful of university
research groups were in a position to participate.35
The military services let contracts for R&D on engine
components, materials, and engineering design and analysis
methods. Gas turbine performance, efficiency especially,
depends on the maximum temperatures that components such
as turbine blades will tolerate without early failure. Research
groups studied basic material phenomena (thermally activated
microstructural changes leading to degradation in properties)
and life-prediction methods (blade elongation and failure
as a function of time-temperature history). DoD also funded
much work in computational fluid dynamics, computer-based
procedures that could be applied to flow fields around gas
turbine airfoils (and to aircraft wings and the hulls of warships).
With digital computers to aid calculations, earlier simplifying
assumptions could be relaxed and predictive accuracy
improved, reducing the need for trial and error. Despite the
success of theory-based methods, even today such areas as
“operability and stall inception and combustor design…rely
heavily on empirical information.”36
Gas turbines cost a great deal to develop—today, well over
a billion dollars. Much of the work may seem mundane, as
suggested by several of the examples in box 2.1. Nearly invisible
to those outside the gas turbine community, this sort of work has
nonetheless made essential contributions to the performance
increases plotted in figure 2.1 and to reliability, which has also
increased greatly over the years.
Until the 1960s, “engine component research and
development sponsored by the military had been somewhat
random.”37 Over time, work sponsored by different branches,
programs, and services coalesced in more structured programs
focused on the components comprising the “core” (compressor,
combustor, and turbine, through which incoming air passes
sequentially). Early coordinated initiatives such as the Advanced
Turbine Engine Gas Generator program led to the highly
structured IHPTET (Integrated High Performance Turbine Engine
Technology) program, for which the National Aeronautics and
Space Administration and the Defense Advanced Research
Projects Agency joined with all three military services. IHPTET
ran from 1987 until 2005 and spent more than $2.2 billion,
exclusive of industry funding.38 DoD expects IHPTET’s followon, the Versatile Affordable Advanced Turbine Engines (VAATE),
to continue until 2017. VAATE’s goals include fuel efficiency
improvements of “up to” 25–35 percent, depending on engine
type.39 It includes two demonstration efforts with their own
names, suggestive of goals: the Highly Efficient Embedded
Turbine Engine (HEETE) program and the Advanced Versatile
Engine Technology (ADVENT) program.40
Over the years, as jet engine performance improved,
commercial demand complemented military demand.
Powerplants for airliners and business jets incorporate
innovations developed first for DoD; many engines have been
produced in nearly identical versions for military and commercial
sales. Even fighter engines, which must meet quite specialized
requirements (box 2.2), yield spin-offs in the form of hardware
and knowledge. Without the stimulus of military demand, some
of the analytical techniques underlying the highly efficient
turbines that electric utilities began to buy in the 1980s might
never have attracted the necessary investment.
In many other weapons development programs, DoD and
its contractors faced technical difficulties analogous to those
sketched above for gas turbines—flutter in airframes, fracture in
rocket motor casings, unreliable computer software. A look back
at the work in the 1950s on the Army’s tank-mounted Shillelagh
missile found that
The problems encountered in the first 2 years
of development were many and varied and not
easily solved because of a lack of supporting basic
research for Aeronutronic [the contractor] engineers
to draw upon. Consequently, unanticipated
increases in cost and manhours, not commensurate
with technical progress, had to be borne while
attempting to “advance the state of the art.” 41
The government’s response, again, was technology base funding
to “advance the state of the art.”
35 Gas turbine manufacturers “are eager to take advantage of the improved understanding and new techniques that academia can provide. The knowledge base for academic research is arcane,
however, and the community of researchers is small. Presently, only about a half-dozen universities in the United States are making significant contributions.” The Impact of Academic Research
on Industrial Performance (Washington, DC: National Academies Press, 2003), p. 117.
36 Edward M. Greitzer, “Some Aerodynamic Problems of Aircraft Engines: Fifty Years After—The 2007 IGTI Scholar Lecture,” Journal of Turbomachinery 131 (July 2009): 031101-1.
37 Richard A. Leyes II and William A. Fleming, The History of North American Small Gas Turbine Aircraft Engines (Reston, VA: American Institute of Aeronautics and Astronautics, 1999), p. 755.
38 Materials Needs and Research and Development Strategy for Future Military Aerospace Propulsion Systems (Washington, DC: National Academies Press, 2011), p. 41.
39 Steven H. Walker, “Fiscal Year 2012 Air Force Science and Technology,” Statement to Armed Service Committee, Subcommittee on Emerging Threats and Opportunities, U.S. House of
Representatives, March 1, 2011, pp. 12–13.
40 Improving the Efficiency of Engines for Large Nonfighter Aircraft (Washington, DC: National Academies Press, 2007), pp. 97–105, discusses IHPTET and VAATE. Also see Air Force Acquisition &
Technology Energy Plan 2010 (n.p.: U.S. Air Force, n.d.), pp. 20–21. HEETE aims at greater efficiency for installations requiring inlet and exhaust ducts designed to preserve stealth. ADVENT
will demonstrate variable cycle technologies.
41 Elizabeth J. DeLong, James C. Barnhart, and Mary T. Cagle, History of the Shillelagh Missile System, 1958–1982 (n.p.: U.S. Army Missile Command, August 17, 1984), p. 41.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
17
Defense Department Energy
Innovation: Three Cases
Box 2.1. Gas Turbine Engine Development: An Example
General Electric began work on its T700 turboshaft in the late 1960s. Well before the engine passed its military
qualification tests in 1973, the Army had selected the T700 to power the Apache helicopter, then in development,
over a competing model proposed by Pratt & Whitney. The excerpts below from a retrospective study based on
extensive interviewing highlight technical problems of the sort encountered in developing complex systems such
as the T700—problems that differ considerably from those associated with the research part of R&D, at least as
“research” is sometimes pictured.a
GE engineers…simplified the combustor by going to a machined-ring configuration that was made in one
piece. Earlier combustors were made of several pieces and tended to move and slowly deteriorate, limiting
performance and life.b
Engineers…encountered forced vibration of compressor blades when there was a resonant frequency
common to both blades and housing. This problem required some redesign. Also, the unusually high
rotational speed of the compressor shaft…called for improvements in the properties and design of the
disks and blades. GE learned how to manufacture these assemblies in one piece that they termed “blisks,”
using powder metallurgy with a nickel-based alloy.c
While most of the work on the engine was done on contract, the Army engineers co-located at NASA
Glenn in Cleveland [the National Aeronautics and Space Administration’s principal site for propulsion
R&D] conducted 6.1 and 6.2 work [basic research and applied research, respectively] that supported
the contractual effort….They worked on the shape of the air foils in the turbine, on the cooling system,
on pitting in metals, and on lubrication. They ran in-house engine tests in which they mapped engine
temperatures, measured heat distortions and overheating, and took heat transfer data. More recently, they
have studied the possible extension of the operating life of the engine and the reuse of some components
during major overhaul. They have devised inspection protocols, including methods and timing of crack
detection in the metals. Army engineers made the fruits of all this labor, including data sets from tests
and experiments, available to industry.
One especially successful piece of Army 6.1 work at NASA Glenn was related to the process, now standard
in the industry, for applying ceramic coatings to line the combustor and the blades in the hot section of
the engine. Ceramic coating allows higher operating temperatures and hence greater efficiencies.
The Army also funded 6.1 basic research at universities on rare-earth magnets that enabled significant
weight and size reductions for starters and generators. The engineers at AATD [the Army’s Aviation
Applied Technology Directorate] realized the significance of university findings in this area and brought
them to the attention of GE.
As these excerpts indicate, the contributions of Army personnel extended beyond program management. In
programs involving multiple organizations with potentially conflicting objectives and incentives, DoD employees
have often served as a communications hub linking rival firms.
a The excerpts are from Richard Chait, John Lyons, and Duncan Long, Critical Technology Events in the Development of the Apache Helicopter: Project Hindsight Revisited (Washington,
DC: National Defense University, Center for Technology and National Security Policy, February 2006), pp. 11–12.
b Combustion is rapid and violent; it can do considerable damage in a short time unless combustor components are rigidly fixed.
c Blisks have come to be considered a major innovation.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
18
Defense Department Energy
Innovation: Three Cases
Box 2.2. Gas Turbine Design Considerations
Military and commercial gas turbines are basically similar (with exceptions for “disposable” engines powering
cruise missiles, which need run only a few hours), and powerplants fitted to bombers or military transports may
be sold in nearly identical form to commercial customers. The core of the engines powering many Boeing 737s,
for instance, was originally developed for a dramatically different sort of plane, the B-1, a long-range swing-wing
strategic bomber capable of supersonic flight.
Airlines seek economy of operation above all. Their priorities begin with high fuel efficiency at cruise, the “design
point,” and low maintenance requirements during years of heavy use. Military planes fly few hours by contrast
and jet fighters accelerate and decelerate, dive and climb, and transit between subsonic and supersonic flight.
Fuel efficiency matters, and pilots cruise in fuel-conservation mode while ferrying or loitering in battle zones.
Nonetheless, the success of combat missions hinges on performance under conditions far from the engine’s
optimal operating point. As a result, design considerations at both the front and back ends of the powerplant differ
from those for commercial (and other military) aircraft, and can become quite complicated.a Whereas engines are
normally hung on the outside of civil aircraft, they must be integrated with the airframe for supersonic flight or
stealth, which means lengthy inlet and exhaust ducts within the fuselage. At the front, the ducts often incorporate
variable geometry inlets for managing compromises between subsonic and supersonic regimes. At the rear, exhaust
nozzles converge, then open out again, and afterburners boost thrust. Despite these differences, the core of the
engine may be essentially the same as that of derivatives intended for commercial service.
a For a useful summary of operating regimes and efficiencies of engine types, see Philip P. Walsh and Paul Fletcher, Gas Turbine Performance, 2nd ed. (Oxford, UK: Blackwell Science,
2004), chap. 1. Bernard L. Koff, “Gas Turbine Technology Evolution: A Designer’s Perspective,” Journal of Propulsion and Power 20, no. 4 (July–August 2004): 577–95, provides
an accessible component-level technical review of the sources of performance improvement over several decades.
Conclusion
Intense competition—involving the two largest American
suppliers, GE and Pratt & Whitney, and Britain’s Rolls-Royce—
contributed to the fast pace of gas turbine technical advance. So
did far-sighted management by DoD and the services, which by
the end of the 1950s realized that traditional approaches to R&D
and procurement were inadequate in view of new engineering
acquisition program is a recipe for disaster.” 42 The lesson was not
obvious at first; it had to be extracted from ongoing projects and
programs, then absorbed and propagated. The lesson has also
needed to be periodically rediscovered.
Case 2: Alternative Fuels
for the U.S. Military
ad hoc decisions made as problems arose, was new. Today it is
Liquid fuels account for over half of DoD energy use. Jet fuel
powers diesel-driven electrical generators as well as aircraft,
combat vehicles, and many naval vessels. The Navy and Air
Force have publicized ambitious goals for replacing a portion
of the petroleum-based fuels they use with alternatives.43
These might be synfuels—liquids synthesized from coal or
some other nonpetroleum hydrocarbon—or biofuels produced
conventional wisdom that “developing new technology within an
from plant matter. Army leaders, apparently seeing no good
complexities. Along with microelectronics and computing and
earth-orbiting satellites, gas turbines are a preeminent example
of dual-use innovation in the post–World War II period.
In the 1950s, the very idea of project or program management
within DoD as an end-to-end activity, rather than a series of
42 Evaluation of U.S. Air Force Preacquisition Technology Development (Washington, DC: National Academies Press, 2011), p. 4. Acquisition, in DoD terminology, covers both procurement and
RDT&E.
43 The Air Force, the largest consumer of fuel among the services, has set the following objective: “By 2016, be prepared to cost competitively acquire 50% of the Air Force’s domestic
aviation fuel requirement via an alternative fuel blend in which the alternative component is derived from domestic sources produced in a manner that is greener than fuels produced
from conventional petroleum.” Air Force Energy Plan 2010 (n.p.: U.S. Air Force, n.d.), p. 8; further discussion appears on p. 25. The Navy’s objective is as follows: “By 2020, half of the
Navy’s total energy consumption afloat will come from alternative sources.” A Navy Energy Vision for the 21st Century (Washington, DC: Office of the Chief of Naval Operations, October
2010), p. 5. Both these statements should perhaps be regarded as “stretch goals.” The Air Force and Navy also have set energy-related targets for infrastructure facilities on land.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
19
Defense Department Energy
Innovation: Three Cases
reason to push for alternative fuels now, have stressed
reductions in consumption.44
Making synthetic fuels from coal is not a technological
challenge. Synfuels technology is mature, with production
experience going back decades and hundreds of plants in
operation worldwide. Uncertainty does attach to costs for largescale synfuels plants incorporating the latest processes, but
greenhouse gases (GHGs) are the major issue. Coal contains more
carbon than oil, and without sequestration of the excess carbon
dioxide (CO2) released, net emissions increase. That increase
would be contrary to the announced policies of the services.45
If DoD has no reason to push into coal-based synfuels, the
military may have more to contribute to innovation in biofuels.
Both sustainability and costs, which could prove uncompetitive
even at oil prices well over $100 per barrel, pose obstacles to
commercialization. There are many technological pathways to
be explored in search of cost-effective technologies that could
promise large-scale production without infringing on global
food output and prices or adding to the atmospheric GHG
burden. This is an agenda for the medium term and beyond. Both
technical and economic uncertainties are large. With a decade or
more of demonstration, scale-up, and learning ahead, biofuels—
whether or not based on conservative technical choices—hold
no immediate promise of replacing any substantial share of
DoD’s petroleum consumption. The longer-term R&D agenda
for exploration of more speculative technologies, including algal
feedstocks, might benefit from DoD’s demonstrated ability to
manage technology development with practical ends in view,
rather than science.
Fuel Costs and Import Dependence
Over 80 percent of the petroleum purchased and consumed
by the U.S. military consists of jet fuel designated JP-5 or JP-8;
diesel fuel makes up nearly all the rest.46 By volume, recent
purchases peaked in fiscal 2003 with the invasion of Iraq, then
declined even as rising oil prices pushed expenditures upward:
fuel doubled as a share of DoD outlays, from 1.5 percent to 3
percent, between fiscal years 2004 and 2008. Consumption did
not change much, but purchases rose from $7 billion (2004) to
$18 billion (2008). Prices then fell back somewhat, but in 2011
DoD paid more for jet fuel just as motorists did for gasoline.
Even so, the Energy Information Administration (EIA, part of the
Energy Department) predicts relatively flat oil prices over the next
quarter century, with inflation-adjusted prices in the range of
$120 per barrel.47
Oil prices respond almost instantaneously to international
political events (e.g., the threat of supply constrictions) and to
economic fluctuations affecting demand. A small number of big
suppliers—state-owned or state-controlled enterprises inside
and outside the Organization of Petroleum Exporting Countries
(OPEC), plus a handful of private multinationals—dominate
production. In recent years, most have appeared to pump
oil at or near capacity most of the time. By most indications,
Saudi Arabia alone retains the ability to affect prices by raising
or lowering output. Otherwise suppliers must act together to
set prices, and in recent years that has come to seem mostly a
theoretical possibility. Periodic fears of disruption linked with
political unrest or war have had greater effects, and sharp swings
in prices have been common, affected also by asynchronous
demand variations in major markets. Price increases have been
moderated by declining energy intensity (energy consumption
relative to economic output) in most parts of the world. This is
the principal reason EIA does not expect the long-term trend to
be sharply upward.
Acknowledging the more dramatic scenarios some analysts
put forward, there seems little in what is actually known about
world oil reserves and the workings of the international market to
suggest that the U.S. military faces either intolerably burdensome
fuel costs or supply risks in the foreseeable future. DoD buys
fuel alongside other purchasers. It is a big customer, but not
big enough to affect prices. Long-distance transport of crude
oil and refined products is routine and inexpensive. So long
as the world market remains effectively integrated, it would
take a massive injection of substitutable alternatives to affect
prices. Private investors, absent proven capability to produce
alternatives in substantial quantities at competitive costs—or a
package of subsidies such as those for domestic ethanol, perhaps
including binding price guarantees—will find little reason to
increase production capacity rapidly. Fuel is fuel, and as output
of substitutable alternatives builds it will simply flow into the
international market at prices little different from those for other
refined petroleum products.
Given U.S. dependence on imported oil, it is reliability of
supply, rather than pricing, that might seem the larger issue.
44 Army Energy Security Implementation Strategy (Washington, DC: Army Senior Energy Council, January 13, 2009); Power and Energy Strategy White Paper (Fort Monroe, VA: Army Capabilities
Integration Center, April 1, 2010).
45 Air Force Energy Plan 2010 states, “Where possible, the Air Force will develop and utilize renewable and alternative energy to reduce greenhouse gas emissions” (p. 1). A Navy Energy Vision for
the 21st Century commits the service to “lead federal efforts to reduce greenhouse gas emissions” (p. 4). Taken at face value, these statements would rule out liquid fuels made not only from
coal but from oil shale or oil sands, which also push net GHG emissions upward.
46 Defense Logistics Agency Energy Fact Book Fiscal Year 2010 (Fort Belvoir, VA: Defense Logistics Agency Energy, 2011). Military and commercial grades of jet fuel are similar to one another
(suppliers charge slightly more for fuels meeting DoD specifications), and to diesel fuel; all are basically kerosene. The Navy specifies JP-5, which is less volatile than JP-8, for shipboard safety.
Otherwise, DoD has been reducing purchases of fuels other than JP-8, intended to be the U.S. military’s universally available “logistics fuel,” and the Army now runs many of its dieselpowered vehicles and diesel-electric generators on JP-8. The services keep gasoline, which is much more flammable than kerosene, out of combat zones.
47 Annual Energy Outlook 2011 (Washington, DC: Energy Information Administration, April 2011), table B1, p. 157.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
20
Defense Department Energy
Innovation: Three Cases
But again, the market is international; indeed, DoD buys much
of its fuel abroad—in recent years, something like half (box
2.3). Innovations—perhaps sustainable biofuels—would, once
proven, migrate to the lowest-cost-production locations, many of
them presumably overseas. (The United States has no monopoly
on sunshine and arable land.) DoD and the government might
support innovation and subsidize production, but it would be
difficult to wall off domestic output without some compelling
national security rationale. Wartime supply interruptions
might be accepted as justifying government ownership and
reservation of output for the military, but not indefinite fears of
future interruptions. Private ownership coupled with domestic
production and export restrictions would more than likely be
seen as contravening bedrock principles of U.S. foreign economic
policy, which since World War II has been based on borders
nominally open to trade.
In any event, should serious bottlenecks in fuel supplies
appear, the United States will be less vulnerable than many
other countries, including major allies. The U.S. government
can expect to outbid competing customers, beginning with
poor countries totally dependent on imported oil and including
wealthy economies such as Japan that benefit from the U.S.
security umbrella. So long as there is fuel to buy (or commandeer,
in war), DoD will be better able to afford it than almost any other
customer. The armed forces have first claim on the Strategic
Petroleum Reserve. Household consumers and airlines have more
to fear from supply constrictions and price rises than DoD.
Logistics
Transport costs far exceed purchase prices when fuel must be
delivered by tank trucks threading through hostile territory, as
in Afghanistan, where casualty rates have been disturbingly
high.48 Along with trucks, helicopters, and armored vehicles,
diesel generators, cook stoves, and water heaters for showers
and dishwashing burn jet fuel at forward-operating bases.
Transportation of fuel and water to combat areas accounts for
around two-thirds of the fuel consumed in theater by ground
forces.49 As an expert group assembled by the Defense Science
Board put it, “Fuel that is transported at great risk, great cost in
lives and money, and substantial diversion of combat assets
for convoy protection, is burned in generator sets to produce
electricity that is, in turn, used to air-condition uninsulated and
even unoccupied tents.” 50
Some of this consumption will be replaced by alternative
low-temperature energy sources, regardless of whether the
next U.S. war resembles those in Iraq and Afghanistan; but the
costs of tanker aircraft will continue to pace the costs of air-to-air
refueling, and costs for refueling naval vessels at sea will exceed
those at dockside.51 In any case, both costs and risks to personnel
depend on the weight and volume of fuel to be transported.
Provided the end product has the same energy content, it makes
no difference whether it starts as crude oil or biomass. The only
way to reduce costs and risks is to reduce consumption. To the
extent this can be accomplished without sacrificing military
effectiveness, supply concerns will be eased, freeing funds to be
spent elsewhere and permitting soldiers and contract personnel
to assume duties other than escorting convoys.
Design Constraints
Solar panels and wind turbines can replace some of DoD’s
generators. Fuel cells, which, as noted in the next section, convert
the chemical energy in fuel directly into electricity, operate more
efficiently than those generators. But there are no substitutes for
liquid hydrocarbons in powering combat equipment. Secondbest choices are greatly inferior; alternatives must closely
mimic jet fuel. Motorists in Brazil may run their cars on ethanol,
accepting fewer miles per tankful because a gallon of ethanol,
like other alcohols, contains less energy than a gallon of gasoline
or kerosene. Militaries will not similarly sacrifice range or payload
in land vehicles, naval vessels, or aircraft. The weight and space
taken up by fuel subtract directly from fighting power: range and
endurance, weapons loads, electronic warfare pods, protective
armor. Energy density—energy content per unit of mass or per
unit of volume— is a critical variable, and petroleum has higher
energy density than other widely available fuels.
U.S. military aircraft burn some 85 million barrels of jet
fuel each year. No viable substitutes have been found (with
exceptions for very small unmanned aerial vehicles, powered
by electric motors for stealth). Jet engines and gas turbines,
with modifications, will run as happily on alcohol as kerosene,
but not as far; most alcohols have around two-thirds the
energy content of JP-8, cutting range proportionately. The
48 Truck convoys drew 1,100 attacks in Afghanistan alone in 2010, according to General Duncan McNabb of the Air Force, as reported in “Threats to U.S. Supply Lines on the Rise, Says
Transportation Command Chief,” National Defense (blog), February 7, 2011, www.nationaldefensemagazine.org/blog/Lists/Posts/Post.aspx?ID=303.
49Herbert H. Dobbs, Jr., “U.S. Army TARDEC Military Dual-Use Needs with Commercial Idling Reduction,” presentation at DOE National Idling Reduction Planning Conference, Albany, NY,
May 17–19, 2004.
50 Report of the Defense Science Board Task Force on DOD Energy Strategy: “More Fight—Less Fuel” (Washington, DC: Office of the Under Secretary of Defense for Acquisition, Technology,
and Logistics, February 2008), p. 29. Fuel production at the point of consumption has sometimes been suggested—e.g., from garbage. This is technically possible, but holds little practical
promise, except perhaps for applications such as space heating and hot water for dishwashing and showers. The reasons include scale (it takes a lot of trash to make significant volumes of
fuel), reliability and maintainability, and quality control (off-specification fuel would risk damage to costly and militarily essential equipment).
51 Nathan J. Gammache, “Determining the Return to Energy Efficiency Investments in Domestic and Deployed Military Installations” (thesis, Naval Postgraduate School, December 2007),
includes a chart (p. 50, based on unpublished DoD data) that indicates incremental costs of $40–$45 per gallon for aerial refueling and perhaps $2–$3 per gallon for supplying JP-5 to Navy
carriers at sea.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
21
Defense Department Energy
Innovation: Three Cases
Box 2.3. Oil Imports
The U.S. balance of trade has been consistently negative since the mid-1970s. At the time of the 1973–74 and
1979–80 oil shocks, petroleum imports made up 20–25 percent of the value of all imports. With falling prices, the
value of oil imports declined, early in the last decade accounting for less than 10 percent of total imports. Over the
past five years, oil imports declined somewhat by volume but, with rising prices, again rose as a share of imports,
reaching about 19 percent in 2008 and then falling to 15 percent in 2010.a
Purchases by DoD do not contribute much to the import bill. The Defense Logistics Agency (DLA), which buys fuel
for all the services, does so internationally. When possible, DLA takes delivery of refined products near the point
of final consumption—e.g., jet fuel bought from suppliers in Russia and Kyrgyzstan for shipment to Afghanistan.
Overseas purchases account for about half of the fuel bill.b DLA’s domestic purchases include products refined
from imported as well as domestic crude; assuming the import fraction to be one-half, close to the average for all
U.S. petroleum consumption in recent years, DLA’s fuel purchases represent no more than $3 billion to $4 billion
in imported oil, about 1 percent of the value of U.S. oil imports in 2010 and less than 0.2 percent of the value of
all imports.
The Energy Information Administration expects the 12 members of OPEC, which account for some 70 percent
of estimated world reserves, to pump slightly more than 40 percent of world oil production over the next several
decades.c U.S. oil imports will remain high. At the same time, supplies have become more diversified since the
1970s, and the OPEC cartel weaker. Canada now ships more oil to the United States than does any other nation
(followed by Mexico, and only then Saudi Arabia). Domestic output has crept upward in recent years. All these
factors tend to argue against a repetition of unexpectedly sudden supply constrictions. So does the dependence of
many exporting states on oil revenues as a prop to internal security, by buying off political opponents or buying
weapons to suppress them.
To some observers, common sense nevertheless seems to imply that dependence on imported oil weakens the
U.S. economy, and by extension national security, given that military power depends, if indirectly, on the size
and composition of a nation’s economy. These extrapolations from dependence on imported oil to some sort of
larger national vulnerability have little foundation in empirically grounded understanding of either economic
affairs or military security. Within the analytical framework of economics, weakness and strength are problematic
notions, lacking an accepted basis in quantitative measures; governments collect statistics on output, income,
and productivity, not “strength.” Trade deficits, furthermore, are usually taken to be derivative of savings and
investment, viewed as the fundamental forces driving a nation’s balance of payments. The implication of this more
or less standard view is that a reduction in U.S. imports of oil (e.g., from greater domestic output), would simply
lead to a rise in imports of other goods and services. Third, the relationships between economic performance and
military strength are loose. The Soviet Union, after all, managed to remain a superpower for decades by steering a
large share of economic output to its military.
The implications of oil imports for U.S. security interests, then, seem oblique. The administration’s most recent
National Security Strategy put it this way: “Dependence upon fossil fuels constrains our options and pollutes our
environment.” The document is a good deal blunter on climate change: “The danger from climate change is real,
urgent, and severe. The change wrought by a warming planet will lead to new conflicts over refugees and resources;
new suffering from drought and famine; catastrophic natural disasters; and the degradation of land across the
globe.”d No one can say whether one or more of the anticipated conflicts might culminate in war, or if U.S. forces
might be called upon to intervene (or for that matter whether political turmoil or war might cut off oil supplies
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
22
Defense Department Energy
Innovation: Three Cases
from fields in the Middle East). The causes of war are poorly understood, notwithstanding unending streams of
studies examining past conflicts, and the contours of U.S. national security policy depend on domestic politics as
much as, or more than, on international politics. The oil-exporting states of the Persian Gulf, for example, barely
featured in U.S. foreign policy until Soviet troops entered Afghanistan at the end of 1979. Washington’s earlier
regional focus had been almost exclusively on Israel and Egypt. Yet the Soviet presence in Afghanistan, perhaps
because the Kremlin’s forces had occupied Iran during World War II and been reluctant to withdraw afterward,
incited fears that America’s principal enemy might gain a stranglehold over Middle Eastern oil. The Red Army later
retreated and the Soviet Union itself dissolved, yet the United States went on to fight three wars in the region, with
oil at the center of the first, in 1991, if not the other two.
a Trade figures from the Bureau of Economic Analysis, www.bea.gov. The United States also exports substantial quantities of refined petroleum products. In 2010, exports of
petroleum (mostly refined products) amounted to nearly one-fifth (19 percent, by energy content) of imports (both crude oil and refined products).
b Anthony Andrews, Department of Defense Fuel Spending, Supply, Acquisition, and Policy, R40459 (Washington, DC: Congressional Research Service, September 22, 2009).
c International Energy Outlook 2011, DOE/EIA-0484 (2011) (Washington, DC: Energy Information Administration, September 2011), tables 3 and 5, pp. 26 and 38.
d National Security Strategy (Washington, DC: White House, May 2010), pp. 8 and 47.
space; and weight, as for any vehicle, is the enemy of fuel
energy density of kerosene-like liquids produced from coal
or biomass, on the other hand, reaches 97–98 percent that of
JP-8 (on either a mass or volume basis). The Air Force and Navy
have been testing aircraft with 50:50 blends of petroleumbased and synthetic or biofuel—a straightforward technical
armor on the Army’s M1 tanks. Even so, the Abrams enters battle
task that, as expected, has not revealed any surprises. (Blends
in mud or sand—and because combat vehicles depend on
ensure sufficient aromatic content—a matter, basically, of
speed, acceleration, and agility to attack (or dodge) the enemy—
ring-structured molecules—to protect seals and hoses in
militaries want powerful engines, all-wheel drive, and big, heavy,
engines and fuel systems designed for ordinary jet fuel, which
knobby tires or tracks—features that increase fuel consumption
contains about 20 percent aromatics.) Hydrogen has a higher
over and above that of road vehicles. The light and powerful gas-
energy density than kerosene on a mass basis, but even
turbine engine in the Abrams gives it speed and acceleration
compressed to 10,000 psi occupies five times the volume; a
that outclass the diesel-engined tanks of other armies, but
bigger plane to accommodate that volume would have more
performance, again as for all vehicles, comes at the cost of greater
aerodynamic drag, driving up fuel consumption and requiring
fuel burn, while fuel efficiency, as for all gas turbines, drops
more powerful engines. Concepts for aircraft fueled by liquid
precipitously at low loads. “Current M1 engines at idle burn 12
hydrogen, which occupies less volume than compressed gas
gallons of fuel per hour to support a roughly five-kilowatt load
(but still about three times the volume of kerosene), have been
[typically air conditioning and electronics], an efficiency on the
proposed, always to be dismissed as technological overreach.
order of one percent.”53
economy.52 Composites and ceramics help limit the weight of the
with only 40 rounds for its main gun because there is no room for
more. Because they must be able to travel in deserts or forests,
(In the 1950s, the Air Force and the Atomic Energy Commission
The Navy cannot escape a similar logic, even though ships are
explored nuclear power for aircraft, aiming at a bomber that
space-constrained more than weight-constrained. Before World
could cruise the skies indefinitely; this too proved overreach.)
War I, navies refueled at far-flung coaling stations. Oil-fired boilers
For aircraft, synfuels or biofuels remain the only alternatives.
increased flexibility. Oil has about twice the energy density of
Military ground vehicles never seem to have enough interior
coal (depending on the type of coal), but the big differences
52 W. Blair Haworth, Jr., The Bradley and How It Got That Way: Technology, Institutions, and the Problem of Mechanized Infantry in the United States Army (Westport, CT: Greenwood, 1999), includes
extensive discussion of the compromises forced on the Army by engineering realities during design and development of the Bradley fighting vehicle.
53 Report of the Defense Science Board on More Capable Warfighting through Reduced Fuel Burden (Washington, DC: Office of the Under Secretary of Defense for Acquisition and
Technology, May 2001), p. 45. Future combat or transport vehicles might be fitted with hybrid powertrains, most likely combining diesel engines and electric motors, to improve operating
efficiency at light loads.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
23
Defense Department Energy
Innovation: Three Cases
Box 2.4. Synthetic Fuels from Coal: Costs and Carbon Dioxide
Investor Uncertainty
The prospect of high rewards from innovation in low-cost conversion of coal to liquids, along with persistent
concerns over supply in technically advanced countries without their own oil, notably Germany (a world leader in
chemistry, chemical engineering, and the chemical industry since the 1880s), has led to decades of exploration and
evaluation of plausible technical pathways. Only the Fischer-Tropsch (FT) process has been widely commercialized,
and then mostly with governmental financing. Nazi Germany depended on FT synfuels during World War II; and
South Africa, fearing an embargo of oil imports, embarked on production of FT synthetics during the years of
apartheid. Production in South Africa continues, and commercial airliners serving Johannesburg routinely fill their
tanks with 50:50 blends of petroleum-based and synthesized jet fuel.
FT and similar synfuels have attracted few private investors, who, given volatile oil prices, judge the risks
excessive; in the absence of recent government investments, most existing plants are old or, if of more recent
design, relatively small and intended in part for process development. Recent studies predict that coal-to-liquid
conversion based on large new plants incorporating the latest technology could be economically competitive
at crude oil prices in the range of perhaps $60 to $100 per barrel.a Since these estimates are preliminary, made
without the benefit of detailed engineering studies, prospective investors view them, rightly, with skepticism.
Cost overruns on past energy projects have been frequent and sometimes large (and underestimates almost
unheard of). While successful experience with new plants would probably initiate a sequence of incremental
innovations leading to cost declines, the starting point for such learning curves cannot be known until plants
have been built and operating experience accumulated.b
As investors will continue to recall, Congress shut down the Synthetic Fuels Corporation, established in the wake of
the 1970s energy shocks, after oil supplies loosened and prices plummeted. In the absence of credible government
price guarantees, private financing will flow to massive new synfuels plants only if investors believe oil prices will
remain high. So long as Saudi Arabia controls excess production capacity sufficient to drive down prices at will,
investors may lack the necessary confidence.
The Burden of Added CO2
When Congress approved the Synthetic Fuels Corporation in 1980, climate change had hardly any visibility. Today,
the additional CO2 released in making synfuels from coal would be widely seen as unacceptable. The dilemma
could be resolved through capture and sequestration (long-term storage) of the excess, a subject we have reviewed
previously.c Since the CO2 from FT synthesis is relatively concentrated, unlike the dilute gases released by pulverized
coal burned to generate electrical power, processes for capture promise to be simpler and less costly. Published
estimates suggest it might add only a few cents per gallon to the costs of synfuels (including capture at the plant
site, compression, transportation, and sequestration).d These processes, however, have not been demonstrated at
scale, and even if separation turns out to be inexpensive, sequestration promises to be an obstacle. The first step
should be demonstration of practices and policies for underground storage on a large scale acceptable to the public.
If and when demonstrations begin, public opposition could well build with awareness.
a Liquid Transportation Fuels from Coal and Biomass: Technological Status, Costs, and Environmental Impacts (Washington, DC: National Academies Press, 2009).
b Investors place greater confidence in results from actual demonstrations than projections based on R&D results and engineering studies. Mary Jean Bürer and Rolf Wüstenhagen,
“Which Renewable Energy Policy Is a Venture Capitalist’s Best Friend? Empirical Evidence from a Survey of International Cleantech Investors,” Energy Policy 37 (2009):
4997–5006. Thomas J. Tarka, et al., Affordable, Low-Carbon Diesel Fuel from Domestic Coal and Biomass, DOE/NETL-2009/1349 (n.p.: Department of Energy, National Energy
Technology Laboratory, January 14, 2009), bury the following caution near the end of their report (p. 61): “An overwhelming amount of risk will continue to exist until plants
that integrate the technologies to produce liquid fuels from coal and coal/biomass mixtures are designed, built, and operated in the United States.”
c Innovation Policy for Climate Change (Washington, DC: Consortium for Science, Policy & Outcomes; and Boston, MA: Clean Air Task Force, September 2009); also see the
background paper for that project, “Energy Innovation Systems from the Bottom Up: Post-Combustion Capture,” March 2009, www.cspo.org/projects/eisbu/.
d Liquid Transportation Fuels from Coal and Biomass, p. 191.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
24
Defense Department Energy
Innovation: Three Cases
were reductions in manning, since stokers were no longer
generally similar approaches are widely known, and biodiesel
needed to feed boilers, and practical refueling at sea (coal could
for road vehicles is available in the United States and elsewhere.
be transferred from one ship to another only in bags, baskets, or
The costs of pushing into synfuels might also be manageable.
buckets, an emergency measure possible only in calm waters,
Yet for reasons summarized in Box 2.4 it would be foolish to
while liquid fuel can be pumped aboard at sea from tankers). In
contemplate large-scale production from coal without capturing
the 1950s, nuclear reactors promised unlimited range, albeit at
and sequestering some or all of the CO2 produced. This too
much higher first cost—an easy choice for submarines, for which
seems possible technically. But neither extraction nor storage
nuclear power conferred great tactical and strategic advantages.
(e.g., in stable geological formations) has yet been demonstrated
That is not the case for surface ships, and after protracted conflict
at scale; indeed, testing and demonstration have hardly started,
within the Navy and between the Navy’s nuclear power faction
despite years of discussion and planning by the Department of
and the Office of the Secretary of Defense, nuclear propulsion for
Energy (DOE).
surface ships is now confined to aircraft carriers.54
Biofuels raise a different set of issues. When plant matter
grows, it takes up CO2 from the atmosphere. If cultivation,
Synfuels and Biofuels
processing, and final consumption can be managed so as to
Sound policy would set two preconditions for large-scale
balance additions and removals of atmospheric CO2, carbon
production of alternative fuels: costs that promise to be
neutrality might be achieved without capture and storage.
competitive with petroleum-based fuels at likely future oil prices
No one yet knows whether achieving neutrality in this way is
and GHG neutrality or reduction. At present, neither coal-based
possible. There are many possible starting points and reaction
synfuels nor biofuels satisfy these preconditions. For synfuels,
GHG sustainability is the principal obstacle. Because coal contains
more carbon than oil (in the range of one-third more, depending
pathways, hence variables to be considered. Relatively few have
been carefully explored.55
Ethanol from corn illustrates the questions that will have
on grade of coal), more net CO2—the principal GHG—will be
to be answered. U.S. production is viable only because of
released on a mine or well to wings or wheels basis. For biofuels,
subsidies in the form of mandated blending with gasoline.56
both costs and sustainability pose questions that cannot at
present be answered. Potentially sustainable pathways, such as
By most accounts, the consequences include increasing GHG
aquatic biomass (algae), may or may not prove cost-effective,
emissions (because of added agricultural inputs, including
while established pathways, notably ethanol from corn, cannot
fuels, agrochemicals, and land clearing), acknowledged when
promise sustainability either in terms of GHG release or effects on
Congress in 2007 placed a ceiling on future consumption of
food supplies from agriculture.
corn ethanol and a floor under cellulosic ethanol.57 In any case,
With energy density similar to that of JP-8 as a first-order
constraint, the ideal alternative would be a “drop-in” fuel that
alcohols hold little interest for DoD except perhaps in fuel cells
(see the next section).
Nonalcohol biofuels might or might not combine military
could be distributed via existing infrastructure (pipelines, tanker
aircraft) and that required no changes to existing aircraft, ground
acceptability with sustainability. Diesel fuel and jet fuel can
vehicles, ships, and generator sets. That alternative would not
be made from biomass. Numerous small U.S. refiners produce
be hard to achieve. Synthetic liquids have been made from coal
biodiesel; capacity exceeds demand by several times.58 Most
since the 1930s by means of the Fischer-Tropsch process, other
U.S.-produced biodiesel comes from soybeans, a crop that, like
54 Aircraft carriers in fact gain little meaningful advantage from nuclear power, since they sail as part of a task force (necessary, in part, to protect the carrier from attack) that must be refueled
periodically, and carriers too have to be resupplied periodically with jet fuel for their planes and, in times of war, munitions. On the conflict over nuclear power in surface ships, see Francis
Duncan, Rickover and the Nuclear Navy: The Discipline of Technology (Annapolis, MD: Naval Institute Press, 1990).
55 To begin with, the carbon content of candidate types of biomass ranges from about 40 percent to 70 percent—a lot of variation, and a lot of carbon (although less than most coals). Stanislav
V. Vassilev, David Baxter, Lars K. Andersen, and Christina G. Vassileva, “An Overview of the Chemical Composition of Biomass,” Fuel 89 (2010): 913–33.
56 The Energy Policy Act of 2005, extended in 2007 by the Energy Independence and Security Act, sets minimum schedules through 2022 for biofuels consumption by fuel blenders. Randy
Schnepf and Brent D. Yacobucci, Renewable Fuel Standard (RFS): Overview and Issues, R40155 (Washington, DC: Congressional Research Service, October 14, 2010). A number of states also
subsidize biofuels.
57 Practical production of cellulosic ethanol from plant wastes and nonfood crops has not yet been demonstrated. Robert F. Service, “Is There a Road Ahead for Cellulosic Ethanol?” Science 329
(August 13, 2010): 784–85. Liquid Transportation Fuels from Coal and Biomass: Technological Status, Costs, and Environmental Impacts (Washington, DC: National Academies Press, 2009) provides
an extensive review.
58 Monthly Biodiesel Production Report, DOE/EIA0642 (2009/12) (Washington, DC: Energy Information Administration, October 2010), table 1, p. 3.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
25
Defense Department Energy
Innovation: Three Cases
other common cultivars, converts no more than around 1 percent
advanced, sustainable biofuels pathways (e.g., algae), a task that
of sunlight into chemical energy. Although plant breeding and
calls for R&D directed at eventual commercialization rather than
genetic engineering promise increased rates of crop growth,
the science-focused programs that DOE has preferred.
hence biofuel yields, algae appear to hold greater theoretical
Case 3: Lighter Loads for Soldiers
potential, converting up to 10 percent of sunlight into chemical
Along with much other gear, foot soldiers carry electrical and
energy.59 Because algae grow in fresh, brackish, or salt water (e.g.,
electronic equipment, often including GPS receivers, electronic
as seaweed), they do not compete with food crops for land. Even
map displays, laser rangefinders, and night vision goggles.
so, much R&D appears necessary to identify the best strains and
Power requirements for these systems range upwards from a
develop high-yield, low-cost production methods; candidate
watt or two. Radios are especially power hungry, the more so
feedstocks number in the thousands or tens of thousands and few
conversion processes have been explored in depth.60
when transmitting. Ongoing technical advances—networked
Conclusion
walls—mean that troops will be asked to carry more, and will
surveillance, data fusion, perhaps even sensors that see through
want to, because of the battlefield advantages.
As a technical matter, DoD could easily enough leave oil behind
The Pentagon’s operational energy strategy states that troops
by supporting large-scale production of coal-based synfuels.
There is no reason for DoD to do so, absent carbon capture
in Afghanistan “may carry more than 33 batteries, weighing up to
and sequestration, a conclusion Congress reached in including
10 pounds.”63 How much a particular soldier carries depends on
language in the 2007 Energy Independence and Security Act that
specialty (loads for radio operators exceed those for riflemen) and
bars federal agencies from purchasing alternatives to petroleum-
mission length (longer missions mean more spare batteries). The
based fuels if this would lead to increased net GHG emissions.
average load runs around 100 pounds.64 Loads have risen over
Unlike synfuels, biofuels could prove to be GHG-neutral or
the years, and the Army and Marine Corps would like to reverse
GHG-negative without carbon capture and storage (a technology
that trend. While troops travel to forward areas aboard vehicles
for which federal agencies charged with demonstration
whenever possible, once on foot heavy packs reduce the speed,
have accomplished little). Yet the knowledge base is skimpy
agility, and endurance of even the fittest soldiers. As part of the
for nonalcohol biofuels; little can be inferred about costs,
strategy for its Science and Technology (S&T) program, the Army
and because the “fundamental chemistry of most [biomass
hopes to “develop and mature technology” that would reduce
conversion processes] is not well understood,” it has been
loads on typical missions to something under 40 pounds.65
61
Reducing the weight attributable to electrical and electronic
difficult even to establish R&D priorities. While algae boosters
express optimism, one of the few carefully detailed analyses to
equipment calls for innovations in two main classes: lighter
appear concludes that “even with low capital charges, it is not
batteries (or other sources of electricity), more precisely batteries
possible to produce microalgae biofuels cost-competitively with
able to store more electrical energy per unit of weight; and
fossil fuels, or even with other biofuels, without major advances
equipment that reduces battery weight by drawing less power
in technology.” Major advances in technology usually require
(without sacrifice in performance). Battery innovation is ongoing,
major R&D funding—and well-managed R&D.
driven in part by commercial demand. Well-known methods for
62
Nearly alone among federal agencies, DoD knows how
the design of low-power components (e.g., integrated circuits,
to manage science in support of technology. A multiservice
ICs) and systems can cut power consumption by two or more
undertaking of the sort that proved so effective in advancing
orders of magnitude in some cases, with concomitant reductions
gas turbines offers a possible model for aggressive pursuit of
in battery weight. Nonetheless, the ongoing plans and programs
59 George W. Huber, Sara Iborra, and Avelino Corma, “Synthesis of Transportation Fuels from Biomass: Chemistry, Catalysts, and Engineering,” Chemical Reviews 106, no. 9 (2006): 4044–98.
60 After supporting systematic study of algae-based biofuels for more than 15 years, DOE abandoned the effort in 1996. Last year, with interest rebuilding, DOE produced a new “national
roadmap.” See A Look Back at the U.S. Department of Energy’s Aquatic Species Program: Biodiesel from Algae, NREL/TP-580-24190 (Golden, CO: National Renewable Energy Laboratory, July
1998); and National Algal Biofuels Technology Roadmap (n.p.: Department of Energy, Office of Energy Efficiency and Renewable Energy, May 2010).
61 The quotation is from Huber, Iborra, and Corma, “Synthesis of Transportation Fuels from Biomass,” p. 4093.
62 T. J. Lundquist, I. C. Woertz, N. W. T. Quinn, and J. R. Benneman, A Realistic Technology and Engineering Assessment of Algae Biofuel Production (Berkeley, CA: University of California, Energy
Biosciences Institute, October 2010), pp. xi–xii.
63 Energy for the Warfighter: Operational Energy Strategy (Washington, DC: Assistant Secretary of Defense for Operational Energy, Plans & Programs, May 2011), p. 4.
64 For measured loads carried by soldiers in Afghanistan by specialty, see The Modern Warrior’s Combat Load: Dismounted Operations in Afghanistan, April–May 2003 (n.p.: U.S. Army Center for
Army Lessons Learned, n.d.); averages appear on p. 113.
65 Defense Research and Engineering Strategic Plan 2007 (Washington, DC: Director of Defense Research and Engineering, n.d.), p. 8. The document says little about how this seemingly improbable
goal might be achieved.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
26
Defense Department Energy
Innovation: Three Cases
of DoD have focused almost entirely on batteries and on possible
replacements for batteries, such as fuel cells, to the neglect of
redesigning systems and equipment to reduce power demands.
Batteries and Applications
Office (GAO) estimates recent Science and Technology program
funding for batteries and fuel cells (i.e., technology base work,
excluding RDT&E as part of weapons development programs) at
about $170 million annually, a figure that is less than 1.5 percent
of the S&T budget.72
DoD purchases and stocks hundreds of different battery
types, many in small numbers for specialized applications. The
guidance systems in Stinger missiles draw power from lithium
batteries (earlier Stingers used chromate cells) that must function
dependably for perhaps a dozen seconds after sitting in a
warehouse for perhaps a dozen years.66 The Navy has spent tens
of millions of dollars on development of a custom-designed
lithium-ion battery to power a submersible vehicle for its SEALs.67
The Army has been working on thin rechargeable lithium-ion
batteries contoured to ballistic vests.68 In the longer term, power
sources may be embedded into clothing—one goal of the
Army’s ambitious effort to develop “soldier systems” that would
combine and integrate many of the functions now provided
through separate pieces of equipment.
This is a vision for the future. With few exceptions today,
each soldier-portable device has its own battery. Few of these
interchange, few are rechargeable, and spares must usually be
carried, since the imponderables of military operations mean that
missions expected to be short sometimes last for days without
resupply. Nonrechargeable batteries are widely specified for
lightness: despite a doubling over the past 15 years in the energy
density of rechargeable lithium-ion batteries popular in civilian
applications, nonrechargeables store substantially more electrical
energy per unit of weight (box 2.5).69
The services do not spend much on batteries, despite their
many applications in military systems. Purchases amount to
perhaps 1 percent of DoD’s annual energy bill.70 As for delivery of
fuel, indirect costs can be much higher: expenditures for shipping
batteries to the Middle East during the buildup to the 1991 Gulf
War were put at more than $500 million (over and above the cost
of the batteries).71 RDT&E spending has also been comparatively
small. Based on partial data, the Government Accountability
GAO reports that only the Army, among the four services,
has actively sought to standardize battery types. Sometimes
there are good reasons for designing special-purpose batteries
into equipment; in other cases, the services specify unique
designs in search of illusory advantages, or contractors
incorporate proprietary batteries to raise profit margins. Greater
standardization would promote interchangeability and reduce
the number of spare batteries soldiers must carry, increase
economies of scale in production, and simplify logistics. A step
as simple as including a state-of-charge indicator on all batteries
would reduce the need for spares and resupply, since troops
often discard batteries that retain half or more of their charge
just to be safe. Given the proliferation of battery configurations,
DoD ends up buying many different types in small numbers
from a thin supply base, one that by most accounts is not very
innovative. Some batteries are available from only a single
manufacturer. During the invasion of Iraq in 2003, “demand
for [BA-5390 and BA-5590 lithium] batteries surged from a
peacetime average of below 20,000 per month . . . to a peak rate
of over 330,000.” Suppliers could not keep up, and “the Marines
reported being down to only a 2-day supply.” 73
The Battery Innovation Landscape
Engineers, scientists, and inventors have worked for generations
to improve batteries. Electric vehicles competed effectively for
a time early in the last century with automobiles powered by
gasoline (and steam) engines. Energy shocks in the 1970s led to
renewed efforts to find substitutes for lead-acid batteries that
might make hybrid and electric vehicles more viable. For the
past several decades, metal-air cells—which employ a metal
or a metallic compound as anode, with air circulating through
66 John Lyons, Duncan Long, and Richard Chait, Critical Technology Events in the Development of the Stinger and Javelin Missile Systems: Project Hindsight Revisited (Washington, DC: National
Defense University, Center for Technology and National Security Policy, July 2006), pp. 11–12. Lithium-based batteries are attractive because the metal is so light, less than 1/20th the
density of lead. They come in many varieties, including rechargeable lithium-metal hydride and lithium-polymer configurations, as well as familiar disposable dry cells.
67 Defense Acquisitions: Success of Advanced SEAL Delivery System Hinges on Establishing a Sound Contracting Strategy and Performance Criteria, GAO-07-745 (Washington, DC: Government
Accountability Office, May 2007), p. 18.
68 Soldiers, January 2011, p. 41. For a useful guide to Army planning for portable power, see Power and Energy Strategy White Paper (Fort Monroe, VA: Army Capabilities Integration Center,
April 1, 2010), pp. 20–24.
69 On advances in the lithium-ion system, see, e.g., Robert F. Service, “Getting There,” Science 332 (June 22, 2011): 1494–96.
70 Troy O. Kiper, Anthony E. Hughley, and Mark R. McClellan, Batteries on the Battlefield: Developing a Methodology to Estimate the Fully Burdened Cost of Batteries in the Department of Defense
(thesis, Naval Postgraduate School, June 2010), p. 9.
71 Meeting the Energy Needs of Future Warriors (Washington, DC: National Academies Press, 2004), p. 49.
72 Defense Acquisitions: Opportunities Exist to Improve DOD’s Oversight of Power Source Investments, GAO-11-113 (Washington, DC: U.S. Government Accountability Office, December 2010).
GAO was unable to collect full information, particularly on costs associated with integration of power sources into systems and equipment. Something over three-fifths of the S&T funds
identified by GAO supported battery R&D, with most of the rest for fuel cells and small amounts for capacitive storage.
73 Defense Logistics: Actions Needed to Improve the Availability of Critical Items During Current and Future Operations, GAO-05-275 (Washington, DC: U.S. Government Accountability Office,
April 2005), pp. 21 and 37.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
27
Defense Department Energy
Innovation: Three Cases
Box 2.5. Battery Performance
Batteries convert potential energy stored in chemicals into electrical energy by causing those chemicals to react.
In a primary or nonrechargeable battery, such as the dry cells used in flashlights, the chemical reaction proceeds in
one direction only; once discharged, the battery must be discarded. In rechargeable or secondary cells, such as the
lead acid batteries in cars, feeding electricity back in reverses the reaction.
Electrochemistry places theoretical upper limits on energy density—that is, how much energy a battery (or other
energy storage device) can supply per unit of weight, normally given as watt-hours per pound, Wh/lb, or watthours per kilogram, Wh/kg. Technological advance for a given cell chemistry is in considerable part a matter of
moving closer to the theoretical ceiling, which practical batteries seldom approach, through innovations in anode
or cathode configuration, separators, electrolytes, and control systems. The military’s lithium-manganese dioxide
BA-5590 battery, for example, stores around 280 Wh/kg. This is nearly twice the energy density of available lithiumion batteries, yet only 35–40 percent of the theoretical maximum for the lithium-manganese system.
Power density measures how fast energy can be withdrawn (as W/lb or W/kg). This is largely a function of reaction
rates and heat buildup. Some batteries have good energy density but poor power density, making them unsuitable
for applications requiring high output bursts, as might be needed for pulsing a laser.
In certain circumstances—where equipment designs accommodate rechargeable batteries, extra weight is
tolerable, and recharging is practicable (which has meant mostly during training)—DoD has been moving away
from its dependence on nonrechargeable batteries, which must be replaced when discharged. In the future, more
equipment will no doubt be designed to accept either type, but so long as nonrechargeable batteries offer better
energy density and power density, they will be the choice in the field.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
28
Defense Department Energy
Innovation: Three Cases
a porous, nonreactive electrode acting as the cathode—have
seemed to offer near-ideal combinations of lightness (they lack
weighty chemicals on the cathode side of cell) and moderate
cost. Rechargeable zinc-air cells, for instance, have long been a
research target. (The zinc-air cells widely used in hearing aids are
nonrechargeable.) Zinc is cheap, and the zinc-air systems promise
energy densities 5 to 10 times better than today’s lithium-ion
cells. The obstacles begin with limited lifetime. Performance falls
rapidly after a few to a few hundred charge-discharge cycles
(typically because uncontrollable side-reactions at the electrodes
lead to internal shorting), while targets for commercialization
range from several thousand charge-discharge cycles to perhaps
10,000 for electric vehicles.
As the illustrations above suggest, even the best batteries,
despite the advances of the past several decades, continue to
seem costly, clumsy, and heavy. Because of performance ceilings
imposed by electrochemical principles, they promise “limited
specific energy with little room for improvement.”74 Since the
determinants of battery weight are well understood and most
of the obviously attractive chemistries have been the subject
of at least some research, big jumps in energy density may not
be achievable. Cost declines through development of cell types
based on inexpensive starting materials hold greater promise.
extent. Costs remain prohibitive, for reasons alluded to in box
2.6, such as short-lived and expensive catalysts. For DoD, the
attractions—quiet stationary power in remote areas, lighter loads
for dismounted soldiers—justify much higher costs than civilian
markets will accept. The Army has conducted a considerable
number of fuel cell demonstrations in recent years, and in 2009
began shipping small numbers to Afghanistan.76 Even if costs
never decline sufficiently for high-volume commercial sales,
advances in fuel cells for military applications will continue and
applications spread.
Reduced Demand for Power
Beyond Batteries
A few years ago the Air Force Scientific Advisory Board (SAB),
stating that “combat controllers, pararescuemen, and combat
weathermen often carry packs weighing several hundred
pounds” and that “thirty percent of the weight is batteries,” called
for the elimination of batteries. According to the SAB, this would
“change the game.”75 Their report does not say how batteries
might be dispensed with, but the SAB most likely had fuel cells in
mind (box 2.6).
Practical small fuel cells would provide a basis for lightweight
power packs for soldiers. Larger units could replace towed
diesel generators and serve as auxiliary power units to minimize
inefficient low-load operation of the main engines in ground
vehicles and naval vessels. Unlike solar and wind power, however,
and despite massive investments in R&D over the past two
decades motivated chiefly by prospective applications to electric
vehicles, fuel cells have not been commercialized to any great
Electrical output, whether from batteries or some other source,
is not an end in itself but an input to some other system. For
minimum weight, soldier-portable systems should draw as little
power as possible consistent with functional performance, so
that battery weight can be minimized (the equipment itself
should not be significantly heavier). Firms designing laptop
computers, mobile telephones, and cordless power tools for
commercial markets proceed in this way. DoD has not followed
suit. A 2004 National Research Council study made the point
forcefully: “Reducing power requirements for computation and
communication by several orders of magnitude” can be achieved
through “aggressive techniques tailored to each application
and to the most likely soldier modes of interaction.” Instead, the
Army and its contractors continued to employ “outdated design
techniques.”77 Little appears to have changed since the Army,
which requested this report, received it more than half-a-dozen
years ago.78
Opportunities for reducing power consumption include
the following:
n
Designing systems around low-voltage ICs (the lower the
voltage, the lower the power drawn)
n
Substituting custom-designed ICs for microprocessor- or
microcomputer-based systems (executing functions in
hardware consumes far less power)
n
Incorporating state-of-the-art load management software
(designed to meet the needs of dismounted soldiers and
otherwise analogous to techniques used to conserve battery
power in mobile computing and communications)
74 Meeting the Energy Needs of Future Warriors, p. 33.
75 United States Air Force Scientific Advisory Board Report on System-Level Experimentation: Executive Summary and Annotated Brief, SAB-TR-06-02 (n.p.: U.S. Air Force Scientific Advisory Board,
July 2006), p. 33.
76 Thomas J. Gross, Albert J. Poche, Jr., and Kevin C. Ennis, Beyond Demonstration: The Role of Fuel Cells in DoD’s Energy Strategy (McLean,VA: LMI, October 2011).
77 Meeting the Energy Needs of Future Warriors, pp. 7–8 and 69.
78 Fiscal Year 2012 Operational Energy Budget Certification Report (Washington, DC: Assistant Secretary of Defense for Operational Energy Plans and Programs, January 2011), which reviews
the fiscal 2012 budgets of the services and their Future Years Defense Programs (looking five years ahead), does not mention any ongoing work aimed at reducing the power consumed by
portable systems and equipment.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
29
Defense Department Energy
Innovation: Three Cases
Box 2.6. Alternatives to Batteries
Fuel Cells
Like batteries, fuel cells convert chemical energy directly (i.e., in a single step) into electrical power. In fuel cells, as
in primary batteries, the chemical reactions that produce electricity cannot be reversed; but unlike such batteries,
a fuel cell can be refilled—e.g., with hydrogen—to provide a new “charge” of chemical energy.
In principle, fuel cells might run on hydrogen, alcohol, propane or butane, liquid hydrocarbons derived from
petroleum, synfuels, or biofuels. Because all of these contain far more energy per unit of weight than the chemicals
in even the best batteries, fuel cells promise advantages in energy density of 20 to 50 or even 100 times (depending
on the system and on a net basis, including auxiliaries and packaging). Power density does not match that of
batteries, but a hybrid system combining a fuel cell and battery could provide the best of both; drawn down to
provide peak power, the battery would be recharged by the fuel cell during periods of reduced demand. (For short
bursts of power, capacitors, which store energy as electrostatic charge, might replace batteries.)
In practice, as so often, costs and engineering realities pose obstacles. Hydrogen fuel cells offer simplicity and
efficiency, but for reasonable volumetric energy density the hydrogen must be stored as either a very lowtemperature liquid or a very high-pressure gas, as mentioned in the preceding section. This requires either a heavily
insulated or a heavily strengthened storage vessel. Liquid fuels consumed directly in the cell or converted first to
hydrogen via standard chemical processes known as reformation tend to foul or poison the catalysts on which fuel
cells and reformers depend; good catalysts are expensive, and JP-8, which otherwise would be ideal for military
applications, is one of the worst starting points because of relatively high sulfur content (sulfur is lethal to catalysts,
and the sulfur content of jet fuel, unlike that of diesel fuel for road vehicles, remains essentially unregulated).
Comparisons
Fuel cells and batteries offer relatively high efficiency (the fraction of energy theoretically available that can be
converted into useful work) compared to most other energy converters. The best diesel engines, for example,
approach 40 percent efficiency under optimal conditions (i.e., the load-speed combination that gives the highest
efficiency). While this is better than gasoline engines or gas turbines can achieve, some batteries approach 90
percent efficiency. For any fuel-burning engine, moreover, efficiency falls off at loads and speeds well away from the
maximum point, so that average efficiencies do not approach the maximum under load-varying conditions, as for
passenger vehicles. Cars and light trucks in typical urban driving, for example, may average 15 percent efficiency
or less. For batteries and fuel cells, by contrast, efficiency does not change much with load (i.e., rate of discharge).
On the other hand, fuel-burning engines exhibit greater energy density and power density than batteries and have
sometimes, for that reason, been considered for soldier-portable power. The technology for combustion engines is
highly developed, manufacturing costs are modest, and small engines can be designed to operate much more quietly
than leaf blowers or model airplanes. Miniature diesel engines could burn jet fuel. On the other hand, combustion
engines would have to be integrated with a generator to produce electrical power, and all such engines scale down
poorly, since heat and mechanical losses rise as a proportion of output. In most evaluations, the disadvantages
have seemed to outweigh the advantages.a
a Meeting the Energy Needs of Future Warriors (Washington, DC: National Academies Press, 2004).
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
30
Defense Department Energy
Innovation: Three Cases
n
Relying more heavily on remote processing (balanced against
alternatives, or else specify custom parts, choose appropriate
the relatively high power demands of robust communications
clock and refresh speeds, and write software code for memory
links with troops in the field), with power-intensive
and display management to minimize energy consumption.
computational functions shifted to systems at base camps,
Little of the applicable knowledge and experience base appears
aboard vehicles, or perhaps carried by robotic platforms
to be utilized in the design of equipment and systems for DoD,
Whenever a transistor or gate in an IC switches, it dissipates
energy, consuming power. The amounts are tiny, but ICs pack
millions of transistors tightly together, and the power inputs
and heat outputs add up (the reason “server farms” run by
companies such as Google display entire roofs covered by
cooling equipment). Because heat dissipation has been a hurdle
on the Moore’s Law path to ever-increasing microcircuit density
for several decades, much know-how concerning low-power IC
design has accumulated. Low-power chip design practices can
cut energy consumption by factors of 10 or even 100, more than
enough to make a meaningful difference in power consumption,
in part because the defense market is small and isolated from
commercial markets and in part because the services continue to
emphasize other performance measures.
Design choices in military equipment will differ from
commercial practice. Trade-offs must be weighed in light of
what matters for soldiers in combat. Reductions in power
consumption, for example, might mean longer access times for
painting screens or loading information, and someone will have
to decide whether such compromises are acceptable. To this
point, such questions seem rarely to be asked.
Conclusion
and the Defense Advanced Research Projects Agency funded a
low-power IC program during the late 1990s, initiating a related
effort in 2010. At the same time, “energy efficiency is a system-
The power drawn by soldier-portable equipment will
probably continue to rise, especially if innovations such as
electromagnetic beam weapons and packable battlefield
level problem,” not just a component design problem. “Every
robots reach the field in quantity. Because soldiers already
aspect of the system has an impact on the energy efficiency,
carry far more weight than desirable, DoD will continue to
and the impact of a given subsystem is usually dependent on its
pay the necessary price for the lightest possible batteries (or
interactions with other subsystems.” 79 The more power drawn by
other power sources, such as fuel cells). Regardless of future
existing equipment, such as radios, the greater the opportunities
advances in batteries and other power sources, DoD should put
for weight saving.
greater emphasis on low-power design. This is not a research
Design of low-power systems calls for competence in
problem. There is an existing, available body of knowledge that
technical areas that have advanced rapidly to serve commercial
DoD contractors could tap in designing the next generation of
markets over the past two decades. Engineers must select
soldier-portable systems and equipment. The Army and Marine
appropriate chips (and peripherals) from perhaps thousands of
Corps should make sure they do so.
79 Thomas L. Martin, et al., “A Case Study of a System-Level Approach to Power-Aware Computing,” ACM Transactions on Embedded Computing Systems, vol. 2, no. 3, August 2003, pp. 255-276;
quotation from p. 256.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
31
Defense Department Energy
Innovation: Three Cases
2
Military Installations and
Energy Technology Innovation
Jeffrey Marqusee 80
The Department of Defense (DoD) is the single largest energy
consumer in the United States, although it accounts for less
than 1 percent of total U.S. energy consumption. Three-quarters
of DoD’s $15 billion energy bill in fiscal year (FY) 2010 went for
“operational” energy—largely fuel used by aircraft, ships, and
tanks, as well as by the generators that produce electricity on
forward-operating bases in Iraq and Afghanistan. The other
one-quarter went for “facilities” (or “installation”) energy—the
traditional energy sources (largely electricity and natural gas)
used to run the 500-plus permanent military installations in the
United States and overseas.
Many see DoD as a key player in our nation’s effort to
start an energy technology revolution, both because of its
heavy dependence on fossil fuels and because of its history of
technological leadership. Understandably, most of the focus
has been on operational energy. Fuel used in Afghanistan must
be transported hundreds of miles by convoys vulnerable to
ambush and improvised explosives. Thus, there is a direct link
between energy innovation and mission effectiveness. Moreover,
the operational energy challenge seems to call for a relatively
straightforward application of DoD’s traditional innovation
model—namely, to inject energy concerns into the military
requirements process, a process that places the highest priority
on improved performance, with cost becoming a concern
principally at the production and procurement stages.
Although they receive less attention, DoD’s efforts in the area
of facilities energy can also be a major driver of innovation. These
efforts require a fundamentally different model of innovation—
one in which cost considerations are central from the beginning.
DoD has applied this model before with considerable success,
however, to foster the development of innovative technologies
to address environmental requirements. Moreover, despite the
distinguishing preoccupation with costs, DoD’s efforts to foster
innovation in facilities energy (like those in the environmental
area) draw on key elements of the traditional DoD innovation
model—namely, the military’s ability to serve as a sophisticated
first adopter of new technologies, and to then buy sufficient
quantities of those that prove effective to jump-start the
commercial market.
Although DoD’s principal goal for facility energy is to
reduce costs, mission assurance is also a key consideration.
Military installations rely almost exclusively for their power on a
commercial grid that experts believe is vulnerable to disruption.
This is a particular concern because permanent installations
increasingly provide direct support to troops in theater, and
also serve as staging platforms for disaster relief and homeland
defense missions. Thus, DoD’s efforts to make its installations
more energy secure (including, but not limited to, support for
smart-microgrid technologies) may be able to draw on the
higher level of support and resources reserved for missionrelated activities.
This paper explores how DoD can drive innovation in the
area of facilities energy—a challenge that the department
has set itself out of self-interest, but one whose efforts can
benefit the country more broadly. First, it describes the energy
challenges installations face and the barriers to innovative energy
technologies entering that market. Second, it discusses DoD’s
successful efforts to foster innovative environmental technology,
which faced very similar challenges. Third and finally, it describes
DoD’s efforts to date regarding installation energy.
80 The author is Executive Director of the Strategic Environmental Research and Development Program (SERDP) and the Environmental Security Technology Certification Program (ESTCP) at
the Department of Defense. Any opinions in this paper are those of the author and do not necessarily reflect the official position of the Department of Defense.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
32
Military Installations and
Energy Technology Innovation
FIGURE
3.1
FY2010 DoD Energy Costs
Operational Energy
$11.18B+
74%
Facilities Energy
$4.01B
26%
FIGURE
+FY09: $9.34B Fuel consumption was 9% less in FY10 than in FY09 but costs
increased by 19.7%.
3.2
Makeup of Installation Energy
RE Purch 0%
Fleet Fuel 6%
Steam 3%
Natural Gas14%
Electricity 26%
LPG 2%
Fuel Oil 9%
Coal 2%
Installation Energy: The Challenge DoD consumes over three-quarters of the energy used by
the federal government; it is the largest local consumer of power
in many areas of the country. Although installation energy
represents only 26 percent of DoD’s energy costs, it accounts for
nearly 40 percent of DoD’s greenhouse gases today; in the future,
as drawdowns in the field take place, the relative importance
of facilities energy in DoD’s overall costs and greenhouse gas
footprint is expected to grow. Currently, installation energy
accounts for half of the Army’s greenhouse gas emissions; in the
future, it could rise to as much as 80 percent.
What drives this energy usage is the sheer size of DoD’s built
infrastructure: the department has more than 300,000 buildings
and 2 billion square feet of building space—an order of
magnitude more than the General Services Administration. The
only organization with a built infrastructure of comparable size
is Wal-Mart, which has 4,200 buildings and about 700 million
square feet of space in the United States. But whereas Walmart’s
buildings are all big-box stores, DoD’s inventory is highly diverse
in terms of building type, size, and age. In fact, DoD’s building
stock is fairly representative of the larger U.S. commercial
building stock.
Driven by economic and security concerns—and regulatory
and statutory targets that reflect these concerns—DoD needs to
significantly change how it uses and manages facilities energy.
Toward this end, the department has set three interrelated goals:
1) Reduce energy usage and intensity.
2) Increase renewable and on-site energy generation
(distributed generation).
3.3
Community Facilities 11%
Troop Housing &
Mess Facilities 12%
FIGURE
FIGURE
3) Improve energy security.
DoD Building Stock
3.4
Utility & Ground
Improvements 1%
25%
Operation & Training 6%
20%
Maintenance &
Production 14%
15%
RDT&E 3%
10%
DoD U.S. Building Size Distribution (sq. ft.)
Supply 15%
5%
Family Housing 20%
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
33
1,000K – 10,000K
100K – 1,000K
50K – 100K
25K – 50K
15K – 25K
10K – 15K
5K – 10K
2K – 5K
0 – 1K
0%
1K – 2K
Administrative 10%
Hospital & Medical 3%
Military Installations and
Energy Technology Innovation
costs, complexities, size, and market forces. Installation energy
technologies are just a subset of the field, but one that is critical
in meeting the nation’s and DoD’s energy challenges. DOE, in its
recent strategic plans and quadrennial technology review, has
laid out the following taxonomy (figure 3.5):
FIGURE
The Department is pursuing an aggressive plan to achieve
these goals, using third-party financing as well as its own
budget. However, existing technology and standard commercial
practices will allow DoD to improve its energy performance by
only a relatively modest amount, and the price will be steep: the
Department’s own estimate is that DoD will need to invest $1
billion to $1.5 billion a year to meet its 2020 statutory goal of a
37.5 percent reduction in energy intensity (2003 baseline).
By contrast, emerging technologies offer the opportunity
to cost-effectively reduce DoD’s facility energy demand by
a dramatic amount (50 percent in existing buildings and 70
percent in new construction), and provide distributed generation
and control technologies to improve energy security. Absent
government involvement, however, these new and emerging
technologies will not be widely deployed in time for DoD to
meet its energy goals and obligations.
The key reason that DoD cannot passively rely on the
private sector to provide a suite of new, cost-effective energy
technologies is the difficulty of the transition from research
and development to full deployment. Many have noted this
challenge; it is often described as the “Valley of Death,” a term
widely used in the early and mid-1990s to describe the obstacles
to commercialization and deployment of environmental
technologies. DoD’s environmental technology demonstration
program, the Environmental Security Technology Certification
Program (ESTCP), was created to overcome that hurdle.
Why can’t DoD rely on the Department of Energy (DOE) to
solve the commercialization and deployment problem? DOE has
a mixed record in this area. Reasons for past failures at DOE are:
1) the lack of a market within DOE for the technologies; 2) overly
optimistic engineering estimates; 3) lack of attention to potential
economic or market failures; 4) a disconnect between business
practices at DOE and commercial practices, which leads to
demonstration results that are not credible in the private sector;
and 5) programs completely driven by a technology “push,” rather
than a mix of technology push and market-driven pull.81
Many of these issues can be viewed as arising from the first:
the lack of a market within DOE. Since DOE is neither the ultimate
supplier nor buyer of these technologies at the deployment
scale, it is not surprising that there are challenges in creating a
system that can bring technologies across the Valley of Death.
DoD’s market size allows it to play a critical role in overcoming
this challenge for the energy technologies the department’s
installations require, as it has for environmental technologies.
In addressing the barriers energy technologies face, and
understanding the role DoD installations can play, it is important
to understand the type and character of technologies that DoD
installations need. Energy technologies span a wide spectrum in
3.5
Taxonomy of Energy Challenges
Supply
Demand
Stationary
Deploy Clean
Electricity
Modernize
the Grid
Increase
Building and
Industrial
Efficiency
Transport
Deploy Clean
Alternative Fuels
Progressively
Electrify the Fleet
Increase Vehicle
Efficiency
Source: DOE, Report on the First Quadrennial Technology Review,
http://energy.gov/sites/prod/files/QTR_report.pdf.
It is useful to divide these energy technologies into two rough
classes based on the nature of the market and the characteristics
of deployment decisions. There are technologies whose capital
costs at full scale are very high, for which a modest number of
players will play a key role in implementation decisions. Examples
include utility-scale energy generation, large-scale carbon
sequestration, commercial production of alternative fuels, nextgeneration utility-grid-level technologies, and manufacturing
of new transportation platforms. Some of these technologies
produce products (e.g., fuel and power from the local utility) that
DoD installations buy as commodities, but DoD does not expect
to buy the underlying technology.
A second but no less important class of energy technologies
are those that will be widely distributed upon implementation,
and the decisions to deploy them at scale will be made by
thousands, if not millions, of decision makers. These include:
1) Technologies to support improved energy efficiency
and conservation in buildings;
2) Local renewable or distributed energy generation; and
3) Local energy control and management technologies.
Decisions on implementing these technologies will be made
in a distributed sense and involve tens of thousands of individual
decision makers if they are ever to reach large-scale deployment.
These are the energy technologies that DoD installations will
be buying, either directly through appropriated funds or in
partnership with third-party financing through mechanisms
such as Energy Saving Performance Contracts (ESPCs) or Power
Purchase Agreements (PPAs). In the DOE taxonomy shown above,
these distributed installation energy technologies cover the
81 P. Ogden, J. Podesta, and J. Deutch, A New Strategy to Spur Energy Innovation (Center for American Progress, January 2008).
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
34
Military Installations and
Energy Technology Innovation
demand space on building and industrial efficiency, portions
of the supply space for clean electricity when restricted to
distributed generation scale, and a critical portion in the middle
where microgrids and their relationship to energy storage and
electric vehicles reside.
There is an extensive literature on the impediments to
commercialization of these emerging energy technologies for
the building infrastructure market.82 A key impediment (and
one found not just in the building market) is that energy is a
cost of doing business, and thus rarely the prime mission of
the enterprise or a priority for decision makers. In contrast to
sectors such as information technology and biotechnology,
where advanced technologies often provide the end customer
with a new capability or the ability to create a new business,
improvements in energy technology typically just lower the cost
of an already relatively low-cost commodity (electricity). As a
result, the market for new technology is highly price sensitive,
and life-cycle costs are sensitive to the operational efficiency of
the technology, to issues of maintenance, and to the estimated
lifetime of the component. Thus, a first user of a new energy
technology bears significantly more risk while getting the same
return as subsequent users.
A second impediment is the slow pace of technological
change in the U.S. building sector: it takes years, if not decades,
for new products to achieve widespread use. One reason for
this is that many firms in the industry are small; they lack the
manpower to do research on new products, and they have
limited ability to absorb the financial risks that innovation entails.
A third impediment to the widespread deployment of new
technologies arises from the fragmented or distributed nature of the
market; decisions are usually made at the individual building level,
based on the perceived return on investment for a specific project.
The structural nature of decision making and ownership
can be a significant obstacle to technological innovation in the
commercial market:
and renewable energy generation (through PPA and the
associated financing entities) require high confidence in the
long-term (decade-plus) performance of the technology,
and thus investors are unwilling to put capital at risk on new
technologies.
Other significant barriers to innovation include a lack of
information, which results in high transactional costs, and an
inability to properly project future savings. As the National
Academy of Sciences has pointed out, the lack of “evidencebased” data inhibits making an appropriate business case for
deployment.83 The return on the capital investment is often in
terms of avoided future costs. Given the limited visibility of those
costs when design decisions are being made, it is often hard
to properly account for them or see the return. This is further
exacerbated by real and perceived discount rates that can lead to
suboptimal investment decisions.
Finally, the lack of significant operational testing until
products are deployed severely limits the rapid and complete
development of new energy technologies. The impact of
real-world conditions such as building operations, variable
loads, human interactions, and so forth makes it very difficult
to optimize technologies, and specifically inhibits any radical
departure from standard practice. These barriers are particularly
problematic for new energy efficiency technologies in the
building retrofit market, which is where DoD has the greatest
interest. In addition to these barriers, which are common
across DoD and the commercial market, DoD has some unique
operational requirements (security and information assurance
issues) that create other barriers.
DoD and Environmental Technology:
A Successful Innovation Model
n
The entity that bears the up-front capital costs is often not the
same as the one that reaps the operation and management
savings (this is known as the “split incentives” or “principal
agent” problem).
n
Key decision makers (e.g., architecture and engineering firms)
face the liabilities associated with operational failure but do
not share in the potential savings, creating an incentive to
prefer reliability over innovation.
n
Financing mechanisms for both energy efficiency (by
energy service companies using an ESPC) and distributed
The impediments that new facilities energy technologies
face today are very similar to those that confronted new
environmental technologies in the mid-to-late 1990s—
namely, a highly distributed and risk-averse market in which
technologies were judged primarily on their perceived
costs, often in the absence of reliable data on actual costs.
To overcome those challenges, DoD created two programs:
the Strategic Environmental R&D Program (SERDP), which
supports the development of technology to meet DoD’s highpriority environmental requirements; and the Environmental
Security Technology Certification Program, which supports the
demonstration and validation of environmental technologies—
including, but not limited to, technologies developed with
SERDP funding.
82 Examples of recent studies are “Energy Efficiency in Buildings: Transforming the Market,” World Business Council for Sustainable Development, April 2009; and “Unlocking Energy Efficiency
in the US Economy,” McKinsey and Company, July 2009.
83 Achieving Federal High Performance Facilities: Strategies and Approaches for Transformational Change, (Washington, DC: National Academy of Sciences), 2011.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
35
Military Installations and
Energy Technology Innovation
FIGURE
SERDP and ESTCP have amassed a very successful track
record in the last fifteen years of advancing environmental
science and engineering, and also transitioning technologies
across DoD. For example, they have transformed how DoD
remediates its contaminated groundwater sites. Technologies
developed and demonstrated by SERDP and ESTCP are now
used across DoD, and have become the standard of practice
across the country for Superfund sites. As discussed below,
DoD’s efforts to foster innovation in facilities energy are limited
to demonstration and validation because (in contrast to the
environmental area) there is ample support for science and
engineering in industry and the DOE. In other words, DoD’s
facilities energy effort replicates ESTCP but not SERDP. However,
because the two programs are so closely intertwined, it is useful
to look at them together.
Environmental technologies developed and demonstrated by
SERDP and ESTCP are deployed on almost every DoD weapons
system platform, are used in almost every DoD cleanup, and are
part of the management of most installations across the services.
These innovative technologies do not lead to new acquisition
systems (although they are contained in many), nor are they
adopted by initiating a new procurement program. They are
typically transitioned through the commercial sector and bought
back as services for environmental management; or they become
part of new standards, specifications, or installation management
procedures; or they are included through upgrades to existing
systems during depot-level maintenance. As with energy,
environmental issues are ubiquitous; it is assumed they can be
managed (or worked around) rather than addressed through
technological innovation; and decisions to deploy technologies
are driven heavily by cost considerations and regulations. Yet
improvements in environmental performance have significantly
reduced DoD’s costs and improved its mission performance,
while allowing DoD to meet its environmental goals. Similar
results are expected if DoD improves its energy performance.
SERDP’s and ESTCP’s effectiveness derives partly from
structural factors (i.e., how the programs are organized), and
partly from their approach to the problems and the linking
of research and development investments to real world
demonstrations. Officially, SERDP and ESTCP programs are
structured as shown in figure 3.6.
This flow chart shows the classic one-way linear progression
from basic research to implementation. Its roots date back to
Vannevar Bush’s classic paper, Science, The Endless Frontier, which
influenced the structure and funding process for many federal
R&D programs. Many have noted that this model neither fits the
way research and development actually occurs, nor necessarily
supports a robust innovation system.84 Although the above is
3.6
Official Structure of SERDP and ESTCP
SERDP
ESTCP
Service
Requirements
Basic/Applied
Research
Advanced
Development
Demonstration/
Validation
Implementation
DUSD(I&E)
ASD(R&E)
DUSD(I&E)
the official structure for the program, it does not reflect how
innovation is supported and fostered within SERDP and ESTCP.
Structurally, SERDP and ESCTP have some unique elements,
some of which were planned and some of which came
about through circumstance rather than design. Having two
programs—SERDP for the science and technology phase, and
ESTCP for demonstration—under the same leadership has been
important. The two programs are integrated in their goals and
objectives but independent in their funding processes. Each
program conducts independent reviews of proposals, but the
reviews of active projects are conducted jointly, and findings are
reported to a single director.
SERDP also has a unique authority in funding research and
development. Although it is classified by DoD as a 6.3 program
(which is typically associated with advanced development), it
has statutory authority to address the full spectrum of science
and technology development, from basic through applied and
advanced development. This flexibility allows SERDP to avoid the
artificial distinction between “basic” and “applied” research and
development; SERDP does not subdivide the two activities. For
the issues that SERDP and ESTCP address, fundamental science
can and should be applied science. Even in the early stages of
research, it is advantageous to be mindful of the likely “in-thefield” applications of the work and the technical and economic
requirements, and structure a “basic” research project to address
those “applied” concerns from the beginning. SERDP funds basic
science, but in a way that ensures that key questions that relate
to real DoD needs are addressed.
SERDP and ESTCP segregate funding decisions for each stage
(science and technology vs. demonstration). This helps prevent
the natural tendency to consider sunk costs in a project when
evaluating its suitability for demonstration funding. The desire
84 See Donald Stokes, Pasteur’s Quadrant, Basic Science and Technology Innovation (Washington, DC: Brookings Institution Press, 1997).
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
36
Military Installations and
Energy Technology Innovation
FIGURE
to make good on sunk costs has driven many poor investment
decisions in the government; this structure serves as a check on
that tendency. When ESTCP considers funding a demonstration
project, no consideration is given to where its prior development
took place. (In fact, as discussed below, for installation energy
technologies, there is no plan for a SERDP investment, given the
large development efforts funded by DOE and the private sector.)
Finally, formally requiring a demonstration phase also forces
rigorous assessment of the state of the technology, and brings
into focus operational, technical, and regulatory issues that can
be explored realistically only in the field; these are critical steps
for environmental and energy technologies.
A more realistic flow diagram for SERDP and ESTCP
investments is shown in figure 3.7. Science and technology
investments are tightly linked between fundamental research
and advanced development. Information is fed back from
3.7
Actual Structure of SERDP and ESTCP
Advanced
Knowledge
Deployed
Technology
SERDP
Fundamental
Research
SERDP
Advanced
Development
Existing
Knowledge
Existing
Technology
ESTCP
Demonstration
Validation
demonstrations, both to contribute to innovations and to
support advances in fundamental science and engineering.
The way SERDP and ESTCP are organized also fosters
cross-pollination of perspectives and expertise, and works to
create communities across DoD. When research proposals
are evaluated, DoD not only considers their scientific merit
(as determined by peer review); it also evaluates them
with representatives from the services who have direct
field experience. Having engineers and managers with this
experience sit on research committees to review proposals
is invaluable. It also creates a community within DoD, across
different branches, for the issues being addressed, which helps
support technology transfer. Technology transfer is not viewed
as an activity to be done after a technology demonstration; it is
integral to the research and demonstration process.
ESTCP demonstrations are conducted to answer the technical,
economic, and operational issues of all the communities that
have a role in future implementations. For a new weapons
system, testing and evaluation is a standard and straightforward
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
part of the acquisition process. In the environmental (and
installation energy) area, implementation is highly distributed,
technologies are procured through multiple mechanisms and
pathways, and there is often no single acquisitions authority;
demonstrations of these technologies are more complex, and
are rarely done with this level of rigor outside of ESTCP. Its role
is not to serve as a centralized mandatory gatekeeper that
all innovative technologies must get past, but rather to be
the instrument to accelerate innovation despite the barriers
discussed above. Technologies are tested and evaluated to assess
their current performance and costs, to meet the needs of all
stakeholders involved in future implementations, and to feed
information back to the R&D community either to facilitate more
rapid development of the next iteration of a given technology or
to stimulate future fundamental research.
The lessons learned by ESTCP in successfully fostering and
transitioning innovative environmental technologies are being
applied now to installation energy technologies. One key
function of the program is that it centralizes the risk of innovative
technologies so as to foster innovation across the DoD enterprise.
It also works to leverage the existing engineering and support
organizations of the services in the selection and execution of the
demonstrations. Technology transfer is best done not by creating
new organizational structures devoted to that mission, but
rather by informing and relying upon the existing management
structures of the services. This requires attention to development
of the soft tools (guidance documents, training material, draft
procurement documents, etc.) of DoD’s management system
that are essential to widespread deployment of technologies.
It is also important to maintain transparency and openness
throughout the testing process, including where demonstration
results are concerned. In an arena in which decisions will be
made by the thousands, DoD’s traditional approach of limiting
access to information will hinder the successful widespread
adoption of new technologies.
DoD’s Innovation Model
for Facilities Energy
Broadly speaking, DoD’s traditional innovation model is to make
large investments to develop a new capability or weapons
system that allows the U.S. military to dominate on the
battlefield. In that context, costs are not a chief concern, given
the dramatic benefits of the new technology; cost savings are
more a part of production and procurement rather than the
innovation process itself.
By contrast, with energy (and environmental) innovation,
cost considerations must be integral from the beginning.
Stated differently, DoD is highly sensitive to both performance
and cost when it comes to energy technology. DoD’s mission
37
Military Installations and
Energy Technology Innovation
is national defense, not energy efficiency or environmental
its infrastructure, the size of its market, and its long-established
protection; as a general matter, DoD does not do something
culture of test and evaluation and early technology adoption.
One indication of the value of this approach is that Wal-
differently just because it’s green—the technologies have to be
cheaper and better than the technologies and methods that
Mart, the largest private sector energy consumer in the United
DoD is currently using.
States, has its own test bed. Wal-Mart systematically tests
innovative energy technologies at designated stores to assess
Energy innovations must also integrate into existing
infrastructure or processes. Innovation is therefore necessarily
their performance and cost-effectiveness. The technologies that
a mix of evolutionary improvements with less frequent radical
prove to be cost-effective (not all of them do, which is itself a
innovations. Radical changes do occur, but DoD must be
valuable finding) are deployed by Wal-Mart in all of its stores. This
cognizant of how they can be transitioned given regulations
approach has helped Wal-Mart dramatically reduce its energy
and standards as well as large investments in legacy systems
consumption. But whereas Wal-Mart’s focus is narrow, because all
and processes.
of its stores are identical, the military needs solutions for a diverse
mix of building types and sizes—everything from barracks and
Installation Energy Test Bed
office buildings to aircraft repair depots and data centers.
The centerpiece of DoD’s innovation model for facilities energy
DoD began the Installation Energy Test Bed as a pilot program
is its Installation Energy Test Bed. The test bed is designed to
in 2009 with $20 million in funds from the Stimulus Act. Seeing
demonstrate emerging energy technologies in a real-world,
the value of these demonstrations, in 2010 the Department
integrated building environment in order to reduce risk,
directed $30 million from the Energy Conservation Investment
overcome barriers to deployment, and facilitate wide-scale
Program, a flexible military construction budget line, to ESTCP
commercialization. The test bed requires no new physical
to continue the test bed. For FY2012, the President’s budget
infrastructure; rather, it operates as a distributed activity whose
proposes $30 million in RDT&E funds for the test bed.
key element is the systematic evaluation of new technologies,
ESTCP has successfully piloted the test bed over the last two
both to determine their performance, operational readiness, and
years. Each year, ESTCP has invited private firms, universities, and
life cycle costs, and to provide guidance and design information
government labs to identify emerging technologies that would
for future deployment across installations.
meet DoD installation needs. The response from industry has
The rationale is straightforward. New technologies offer the
been extremely strong: many of the ongoing demonstrations are
opportunity to cost-effectively reduce DoD’s facility energy
viewed as critical elements in the business plans of both large
demand by a dramatic amount and provide distributed
and small companies seeking to bring their technologies to full
generation to improve energy security. Absent outside validation,
commercialization and widespread deployment. In 2010, ESTCP
however, these new technologies will not be widely deployed in
received more than 300 proposals from leading corporations in
time for DoD to meet its energy goals and requirements, for the
the building energy sector, small start-ups with venture capital
reasons discussed earlier.
funding, and the major DOE labs. The proposals were reviewed
Because it has such a large stock of buildings, it is in DoD’s
by teams made up of technical experts from inside and outside
direct self-interest to help firms overcome the barriers to
of DoD, as well as service representatives familiar with the
deployment and commercialization of their technologies. To
installations’ needs. Winning proposals (about 15 percent of
overcome these barriers requires demonstrations that link
the total submitted) were then matched up with a service and
emerging technology with real-world sites and end users in
an installation at which to demonstrate the technology. ESTCP
order to validate the technologies’ cost and performance.
expected some of the early projects to begin to show results in
Demonstrations can operate both as a technology pull and
late 2011. The most recent solicitation closed in late March 2011;
a technology push—to both accelerate the deployment of
ESTCP received 600 preproposals whose combined requested
emerging technologies and foster the final development of
funds were over a billion dollars.
the next generation of energy technologies. As mentioned
The timing for an energy test bed is ideal, which is one reason
previously, DOE has historically had limited success in playing
the response from industry has been so strong. The federal
this role, at least in part because DOE is not a market for these
government is investing significant resources in building energy
technologies. DoD, in contrast, is uniquely positioned to play
R&D, largely through the Department of Energy, and the private
this role for itself and the nation at large, due to the breadth of
sector is making even larger investments, as evidenced by the
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
38
Military Installations and
Energy Technology Innovation
growth of venture capital backing for “clean tech.” As a structured
maintained with a systems perspective. They are complex
demonstration program linked to the large DoD market, the ESTCP
entities with many nonlinear interactions that affect energy
test bed can leverage these resources for the military’s benefit.
flows and operations. A systems approach is needed to optimize
performance for individual buildings and building clusters
The test bed program carries out demonstrations in three
broad technical areas: energy component technologies, both for
within an installation. Systems approaches will focus on new
efficiency and generation; system approaches to building energy
design tools and the exploitation of distributed sensors linked
control, management, and decision making; and installation-level
to innovative control strategies. In addition to the impediments
smart-microgrid technologies.
to commercialization discussed above, systems approaches face
another major obstacle: the lack of real-world testing, particularly
Component Technologies
in the retrofit market, where DoD has the greatest interest. DoD
The test bed program demonstrates and evaluates advanced
has a unique opportunity in this area due to the nature of its
component technologies for both demand reduction and
installations and the unique security concerns associated with
distributed generation—technologies that, due to real or
information assurance that a demonstration must address.
For example, the pilot program is testing an innovative
perceived risks, are not being used across DoD. The value of
these technologies is very cost sensitive: a new component
approach to “continuous building commissioning.” Over time, the
must provide equal or better performance while reducing
energy performance of buildings degrades; most buildings rarely
life-cycle costs. Life-cycle costs are highly sensitive to a number
meet their design intent, much less perform optimally. Advances
of factors, including the technology’s operational efficiency,
in monitoring and modeling tools now make it possible to
its maintenance costs, and the component’s life expectancy.
continuously optimize building performance. Two pilot projects
For technologies that appear particularly promising, ESTCP
demonstrating a whole-building monitoring system are assessing
shoulders the cost of first implementation, feeds information
its ability to do the following:
back to the developers, and stimulates the adoption of
1) Identify, classify, and quantify deviations from design intent or
technologies that have been shown to be cost-effective. This
optimal performance regarding consumption of energy and
also saves DoD the expense of having costly mistakes repeated
water in the building;
at individual installations.
2) Classify and identify the root causes of such deviation;
One example of DoD’s approach is the pilot program
3) Identify corrective actions; and
currently testing building integrated photo voltaic (BIPV)
4) Quantify the value of these actions in terms of energy and
technologies. BIPV technologies are commercially available
water savings and other economic benefits.
and could be deployed on thousands of DoD flat roofs; they
could be installed during required roof replacements in place
Project participants include United Technologies Research
of a traditional roof, providing both a protective roof and a
Center (lead), Lawrence Berkeley National Laboratory, the University
source of energy. Currently, however, neither the Army Corps
of California at Berkeley, and Oak Ridge National Laboratory.
of Engineers nor the Naval Facilities Engineering Command
(NAVFAC) includes BIPV as a roofing option, because neither has
Smart-Microgrid Technologies
data on the performance of the technology. The pilot program
In addition to demand reduction and increased distributed
is collecting detailed data on the performance of BIPV along
energy generation, DoD’s energy security goal requires the
multiple criteria. NAVFAC leads this project in collaboration with
deployment of smart-microgrid technologies that allow DoD
Lawrence Berkeley National Laboratory.
installations to “island” and provide operational capability in
Systems Approaches to Energy Control
and Management
the event of grid failure. These same technologies offer DoD
opportunities to reduce operational costs through demand
response management. DoD’s requirement for this class of
Although individual component technologies are important,
technology puts it in a unique position: although DoD has
the largest potential payoff lies in the opportunities to integrate
security concerns not found in the private sector, it expects to
technologies throughout a building and across an entire
use commercial smart-grid technologies in the future, rather
installation. Unlike other DoD platforms, such as aircraft and
than developing its own solutions. Standards and smart-grid
ships, buildings and installations have not been designed or
technologies are expected to change significantly in the coming
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
39
Military Installations and
Energy Technology Innovation
FIGURE
3.8
Installation Energy Test Bed Projects,
by Location, Start Date, and Service Type
1) Smart microgrids and energy storage to increase energy
security on DoD installations
2) Renewable energy generation on DoD installations
3) Advanced component technologies to improve building
energy efficiency
49 Energy Projects
4) Advanced building energy management and control
5) Tools and processes for design, assessment, and decision
making associated with energy use and management
2007 = 1
Army
2008 = 6
Navy
2009 = 9
2010 = 10 (2 SERDP)
USAF
2011 = 23
49 Total
USMC
Note: Eight demonstration projects occur at multiple locations.
years; DoD should not adopt an approach that is independent
of, or inconsistent with, the changing commercial market.
The test bed program will demonstrate emerging commercial
technologies configured to meet DoD’s unique security needs,
and evaluate the critical operational and information security
issues related to the use of these technologies.
For example, the pilot program is currently testing a General
Electric smart-microgrid technology at the Marine Corps’
Twentynine Palms installation in California. The technology is
designed to manage and control the complicated interactions
among heat and electrical power generation, power demand,
energy storage, and power distribution and delivery. It can also
optimize energy usage, and offers energy security by managing
backup power operation for critical loads if the microgrid is
disconnected from the bulk grid (or “islanded”). The technology
is scalable and is applicable to multiple DoD installations that
contain renewable resources. However, the economic value and
security of such a system cannot be determined in the absence
of real-world testing on a DoD installation. The system needs to
be integrated with real-world generation and loads to assess its
performance and finalize design details.
To date, nearly 50 demonstrations are under way across DoD
as part of ESTCP’s Installation Energy Test Bed (see figure 3.8).
DoD plans to continue this program in FY2012. A competitive
process is under way to identify the next round of technology
demonstrations in the following areas:
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
The interest from industry has been extremely high.
Companies see the ongoing demonstrations as crucial means
of bringing their technologies to full commercialization and
widespread deployment. The current solicitation has attracted
enormous interest, highlighting the pent-up need for efforts to
move energy technologies beyond research and development
and to overcome the Valley of Death.
Conclusion
DoD has been an enormous engine of innovation in America,
driving the development of both defense technologies and,
ultimately, very large sectors of commercial activity. In addition
to its traditional focus on conventional military hardware, there
is now great interest in applying those capabilities to energy
innovation, an area of activity that can have enormous benefits
both to the United States military and to the country as a
whole. In thinking about this question, it is worth considering
the two different (but complementary) models of innovation
at DoD: the well-known Defense Advanced Research Projects
Agency (DARPA) model, which has produced extraordinary
technological breakthroughs (at great cost) that have allowed
America to dominate the battlefield; and the more recent
SERDP and ESTCP model, which focuses less on cost-insensitive
breakthroughs and more on developing and demonstrating
cost-effective technologies that can enhance the effectiveness
of the overall fighting force. The SERDP and ESTCP’s test bed
cost-consciousness and ability to work across the spectrum from
basic to applied research and demonstration makes it uniquely
effective at assisting innovative technologies across the Valley
of Death and into commercial viability. While the extraordinary
“leap-ahead” innovations of DARPA more easily capture the
imagination, the ability of the ESTCP’s test bed program to
improve the overall energy efficiency of the United States
military—and the civilian economy—should not be overlooked.
ESTCP offers both the military and the nation an effective
approach that can leverage the large investments in energy
technology developments at DOE and the private sector, and
result in a real energy revolution.
40
Military Installations and
Energy Technology Innovation
3
The Dynamics of Military Innovation and the
Prospects for Defense-Led Energy Innovation
Eugene Gholz 85
Many pundits and leaders in the U.S. government hope to
use the model of successful military innovation to stimulate
innovation for green technologies—notwithstanding criticisms
that defense technologies are often expensive and esoteric and
sometimes fail to meet optimistic performance projections.
Advocates particularly hope that the Department of Defense
(DoD) will use its substantial procurement budget to “pull” the
development of new energy technologies; in their vision DoD
will serve as an early adopter to help new energy technologies
achieve economies of scale.86
This paper will build on the baseline of knowledge about
military innovation—what we know about why some largescale military innovation has worked while some has not—to
explain which parts of the effort to encourage defense-led
energy innovation are likely to be more successful than others.
Innovation in major weapons systems has worked best when
customers understand the technology trajectory that they
are hoping to pull and when progress along that technology
trajectory is important to the customer organization’s mission;
under those circumstances, the customer protects the research
effort, provides useful feedback about the development effort,
adequately (or generously) funds the effort, and happily buys
the end product, often helping the developer appeal to elected
leaders for funding. The alliance between the military customer
and private firms selling the innovation can overcome the
collective action problems that providing public goods like
defense and energy security would otherwise face.
This model of military innovation is not the only way that the
U.S. has developed and applied new technologies for defense,
but it is the principal route to substantial change. At best, other
innovation dynamics tend to yield relatively minor evolutionary
improvements or small-scale innovations that can matter a
great deal at the level of a local organization but do not attract
sufficient resources and political attention to change overall
national capabilities.
Applied to energy innovation, this understanding of
innovation suggests that DoD will more effectively pull
development efforts related to operational energy (e.g., fuel
supplies to operating bases in Afghanistan) than efforts related
to energy at military bases in the U.S., even if the efforts for home
installations would cost less, would increase efficiency more,
would better protect energy security (e.g., protecting against
threats to homeland security), or would draw equal support from
private-sector lobbying. The operational energy efforts better
fit into the military’s traditional concerns with innovation in
the field that reduces casualties and eases logistical constraints
(even at the cost of complexity in the logistics chain). Meanwhile,
installation energy improvements try to gain political support by
appealing to a more general conception of the national interest,
recognizing that “security” claims are a useful political lever in the
United States—a code word for “important”—but that promises
to contribute to “energy independence” have failed to attract
sustained support and real funding since President Nixon first
used that phrase.
85 The author is currently on leave from the University of Texas at Austin and is working temporarily as senior advisor to the deputy assistant secretary of defense for manufacturing and industrial
base policy. This paper was written in the author’s private capacity, and it represents only his personal views, not those of the Department of Defense or any other part of the U.S. government.
86 The government has also launched a number of research initiatives such as ARPA-E (Advanced Research Projects Agency–Energy), modeled on DARPA (Defense Advanced Research Projects
Agency), to push energy technology and to encourage invention and prototyping, but those efforts will not be the focus here.
Department
of defense
ENERGY INNOVATION
at the DEPARTMENT of DEFENSE:
Energy
Project
ASSESSING
the OPPORTUNITIES
41
The Dynamics of Military Innovation and the
Prospects for Defense-Led Energy Innovation
However, the operational energy efforts may face other
problems, as the demand for energy-efficient equipment to use
in the field introduces new performance metrics into defense
acquisition that are unfamiliar to the established defense
industrial base, especially at the prime contractor level. The
new performance metrics are likely to require some significant
changes in industry structure, changes that draw on new
technology companies. In past waves of military innovation,
the defense prime contractors have successfully drawn in new
technologies through mergers and acquisitions, joint ventures,
and subcontracting relationships, building on the primes’ core
competency in understanding and responding to the desires of
their military customers.
Sources of Innovation
The customer typically drives military innovation in the United
States, and military customers obviously are used to making
investment decisions based on interests other than the pure
profit motive. Acquisition requirements derive from leaders’
military judgment about the strategic situation, and the military
works with political leaders rather than profit-hungry investors to
fund the needed research, development, and procurement. This
process, along with the military’s relatively large purse compared
to even the biggest commercial customers, is what attracts the
interest of advocates of defense-led energy innovation: they
hope to create an incentive to develop new energy technologies
even if the technologies would not meet the normal rate-ofreturn criteria used by business. Instead, advocates hope to
use the familiar mechanism that led defense companies to
develop the high-tech weapons that won the Cold War and have
performed so well in conflicts since.
Not surprisingly, the companies that have understood the
sources of military innovation have performed the best over
the years. When the Navy first started its Fleet Ballistic Missile
program, the Special Projects Office wanted to give the Navy a
role in the nuclear deterrence mission but did not initially provide
much money to develop and build the Polaris missiles. Lockheed
understood that responsiveness was a key trait in the defense
industry, so the company used its own funds initially to support
development to the customer’s specifications.87 As a result,
Lockheed won a franchise for the Navy’s strategic systems that
continues in Sunnyvale, California, more than fifty years later.
By contrast, at roughly the same time as Lockheed’s decision
to emphasize responsiveness, the Curtiss-Wright Corporation,
then a huge military aircraft company, attempted to use political
channels and technological optimism to sell products of
technology push, notably the company’s preferred jet engine
design. The Air Force preferred the products of companies that
followed the customer’s lead, and Curtiss-Wright fell from the
ranks of leading contractors even in a time of robust defense
spending.88 Northrop later found itself in a similar position. The
Air Force was not interested in buying the F-5 fighter, which
the company had developed largely at its own expense. The
company was confident that the Air Force would in the end
accept the company’s view of desirable technology, once they
had seen the product, but the company was wrong. The Air
Force wanted a fighter that tried to meet the performance
requirements that the Air Force had specified. Northrop managed
to sell F-5s in export markets and had enough other business
to last as a U.S. prime contractor, but its experience shows the
relative power of demand over supply in the U.S. defense market.
History shows that the U.S. military can be a difficult customer
if the acquisition executives lose faith in a supplier’s responsiveness, but the military can also be a forgiving customer if firms’
good-faith efforts do not yield products that live up to all of the
initial hype. Occasionally, a technology underperforms to such an
extent that the program is canceled—for example, the ill-fated
Sergeant York self-propelled anti-aircraft gun—but in many
cases, the military accepts equipment that does not meet its
contractual performance specifications and either nurtures the
technology through years of improvements and upgrades or
discovers that the system is actually terrific despite failing to
meet the specs. The B-52 bomber is perhaps the paradigm case:
it did not meet its key performance specifications for range,
speed, or payload, but it turned out to be such a successful
aircraft that it is still in use fifty years after its introduction and
is expected to stay in the force for decades to come.89 Trying
hard and staying friendly with the customer is the way to
succeed as a defense supplier, and because the military is
committed to seeking technological solutions to strategic
problems, the prime contractors have many opportunities to
develop and sell innovation.
Of course, military desire for a new technology is not
sufficient by itself to get a program funded in the United States.
Strong political support from key legislators has also long been
a prerequisite for technological innovation. While an excess of
pork barrel politics might trap the American military with old
equipment built in the “right” congressional districts, even though
it doesn’t meet soldiers’ true needs, most of the time we don’t
get that excess. Instead, the military and the defense contractors
learned to combine performance specifications with political
logic: the best way to attract political support was to promise
87Harvey M. Sapolsky, The Polaris System Development: Bureaucratic and Programmatic Success in Government (Cambridge, MA: Harvard University Press, 1972).
88 Eugene Gholz, “The Curtiss-Wright Corporation and Cold War-Era Defense Procurement: A Challenge to Military-Industrial Complex Theory,” Journal of Cold War Studies 2, no. 1
(Winter 2000): 35–75.
89 Michael E. Brown, Flying Blind: Politics of the U.S. Strategic Bomber Program (Ithaca: Cornell University Press, 1992).
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
42
The Dynamics of Military Innovation and the
Prospects for Defense-Led Energy Innovation
heroic feats of technological progress, because the way to justify
procurement of a new system (and the politically attractive jobs
that came with production) was to promise that the new system
would substantially outperform the equipment in the current
American arsenal, even if that previous generation of equipment
was only recently purchased at great expense. The political logic
simply compounds the military’s tendency for the technological
optimism that creates such tremendous technology pull for
military innovation.90
In fact, Congress wouldn’t spend our tax dollars on the
military without some political payoff, because national security
offers a classic case of diffuse benefits (all citizens benefit
whether they help pay the cost or not).91 Military innovations’
political appeal—whether supported by ideology (e.g., the
“religion” that supports missile defense), an idiosyncratic vision
(e.g., Senator John Warner’s longtime interest in unmanned
aerial vehicles, or UAVs), or the ability to feed defense dollars
to companies in a legislator’s district (e.g., California legislators,
widely perceived as antimilitary, voted for the B-1 bomber and
the MX missile)—prevents the United States from underinvesting
in technological opportunities.
Because the military is blocked by the professionalism
that defines American civil-military relations from overtly
lobbying for its preferences, its trusted relationship with key
defense contractors provides a key link in developing political
support for military innovation. The prime contractors take
charge of directly organizing district-level political support
for the defense acquisition budget, and any major innovative
project that the military hopes to invest in needs to fit into a
contractor-led political strategy to be funded.92 Other unusual
features of the defense market reinforce the especially strong
and insular relationship between military customers and
established suppliers. Their relationship is freighted with strategic
jargon, security classification, regulation of domestic content,
socioeconomic set-asides, extremely costly audit procedures, and
hypersensitivity to scandals driven by perceived or occasionally
real malfeasance. The military has to work with suppliers who are
comfortable with the terms and conditions of working for the
government, who are able to translate the language in which the
military describes its doctrinal vision into technical requirements
for systems engineering, and who are trusted by the military
to temper optimistic hopes with technological realism without
undercutting the military’s key objectives. The military feels
relatively comfortable discussing its half-baked ideas about the
future of warfare with established firms—ideas that can flower
into viable innovations as the military officers go back and forth
with company technologists and financial officers.
That iterative process has given the U.S. military the best
equipment in the world in the past, but it tends to limit the
pool of companies with which the military buyers directly
contract to a particular set of firms: the usual prime contractors
like Lockheed Martin, Boeing, Northrop Grumman, Raytheon,
General Dynamics, and BAE Systems. The core competency
of these companies is dealing with the unique features of the
military customer.
In addition to that core competency (understanding the
military customer), defense firms, like most other companies,
have technological core competencies. In the 1990s and 2000s,
it was fashionable in some circles to call the prime contractors’
core competency “systems integration,” as if that task could be
performed entirely independently of a particular domain of
technological expertise. In one of the more extreme examples,
Raytheon won the contract as systems integrator for the
LPD-17 class of amphibious ships, despite its complete lack
of experience as a shipbuilder. Although Raytheon had for
years led programs to develop highly sophisticated shipboard
electronics systems, its efforts to lead the overall team building
the entire ship produced an extremely troubled program. In this
example, company and customer both got carried away with
their technological optimism and their emphasis on contractor
responsiveness (Raytheon was willing to promise to try to do just
about anything). In reality, the customer-supplier relationship
works best when it calls for the company to develop innovative
products that follow an established trajectory of technological
performance, where the company has experience and core
technical capability. These are known in the business literature
as “sustaining innovations.” Trying to introduce an established
supplier to new performance metrics —that is, trying to stimulate
“disruptive innovation”—substantially raises the likelihood of
problems on the contract.93
That is not to say that the military cannot introduce new
technological trajectories into its acquisition plans. In fact, the
military’s emphasis on its technological edge has explicitly called
for disruptive innovation from time to time, and the defense
90Harvey M. Sapolsky, “Equipping the Armed Forces,” in George Edwards and W. Earl Walker, eds., National Security and the U.S. Constitution, ed. George Edwards and W. Earl Walker (Baltimore:
Johns Hopkins University Press, 1988).
91 Dwight R. Lee, “Public Goods, Politics, and Two Cheers for the Military-Industrial Complex,” in Robert Higgs, ed., Arms, Politics, and the Economy: Historical and Contemporary Perspectives (New
York: Holmes & Meier, 1990), pp. 22–36.
92 Peter J. Dombrowski and Eugene Gholz, Buying Military Transformation: Technological Innovation and the Defense Industry (New York: Columbia University Press, 2006).
93 This framework for understanding innovation, in which technological trajectories are linked to customer-supplier relationships, derives from Clayton M. Christensen, The Innovator’s Dilemma:
When New Technologies Cause Great Firms to Fail (Boston: Harvard Business School Press, 1997). It is applied to defense in Peter Dombrowski and Eugene Gholz, “Identifying Disruptive Innovation: Innovation Theory and the Defense Industry,” Innovations 4, no. 2 (Spring 2009): 101–17. For a related argument linking Christensen’s framework to defense (that disagrees on one
important aspect of the theory), see Gautam Mukunda, “We Cannot Go On: Disruptive Innovation and the First World War Royal Navy,” Security Studies 19, no. 1 (Winter 2010): 124–59.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
43
The Dynamics of Military Innovation and the
Prospects for Defense-Led Energy Innovation
industry has responded. For example, the electronics revolution
The Military (and Political) Customers
involved huge changes in technology, shifting from mechanical
If the customer-supplier relationship is the key to demand pull
to electrical devices and from analog to digital logic—requiring
for innovation, then the first step in understanding the potential
support from companies with very different technical core
for defense-related energy innovations is understanding the
competencies. Start-up companies defined by their intellectual
customers’ priorities. The emphasis on customer organizations is
property, though, had little insight into (or desire to figure
especially important in this case because of the concentration
out) the complex world of defense contracting—the military
on a relatively few customers in defense—various parts of the
jargon, the trusted relationships, the bureaucratic red tape,
U.S. government—compared to the relative abundance of
or the political byways—so they partnered with established
possible customer niches in the overall global economy. From
prime contractors as subcontractors, in joint ventures, and as
the perspective of firms that actually develop and sell new
acquisition targets. The trick is for established primes to serve as
technologies, the customers include the military services, whose
interfaces and brokers to link the military’s demand pull with the
various components each have somewhat different levels of
entrepreneurial companies having the right skills and processes
interest in energy innovation, and also the political leadership,
for the new performance metrics. Recently, some traditional
notably in Congress.
aerospace prime contractors, led by Boeing and Northrop
Grumman, have used this approach to compete in the market for
unmanned aerial vehicles, although at this point, DoD still buys a
Military organizations decide the emphasis in the acquisition
budget. They make the case, ideally based on military
professional judgment, for the kinds of equipment the military
plethora of different UAV designs from a wide range of suppliers,
needs most, and they also determine the systems’ more detailed
often through nontraditional “rapid” acquisition processes.
requirements, like the speed needed by a front-line fighter
Over time, as UAVs become a more standard item of military
aircraft and the type(s) of fuel that aircraft should use. Relevance
equipment and the wartime rapid acquisition processes revert
to the organizations’ critical tasks ultimately determines the
to the normal procurement channels, the industry structure is
emphasis placed on different performance standards when the
likely to evolve further to cement the prime contractors’ roles as
inevitable trade-offs come during the acquisition process.94 For
information and systems integration brokers.
example, concerns for affordability and interoperability with
Given the pattern of customer-driven innovation in defense,
allies’ systems have traditionally received much more rhetorical
the task confronting advocates of defense-driven energy
emphasis, especially early in programs’ lives, than they have
innovation seems relatively simple: inject energy concerns into
received real emphasis in implementation, when the military
the military requirements process. The military innovation route
actually procures and deploys equipment. When faced with the
might directly address key barriers that hamper the normal
question of whether to put the marginal dollar into making the
commercial process of developing energy technologies, finding
F-22 stealthy and fast or into giving the F-22 extensive capability
markets that promise a high enough rate of return to justify the
to communicate, especially with allies, the program office not
investment, and convincing financiers to stick with the projects
surprisingly emphasized the former key performance parameters
through many lean years and false starts before they reach
rather than the latter nice feature. The challenge for advocates of
technological maturity, commercial acceptance, and sufficient
military-led energy innovation is to link the performance metrics
scale to earn profits. But using the military innovation process
they would like to emphasize in defense systems to the military
presents three other challenges to energy innovation: fitting the
services’ interests that are driven by links between strategic
role of energy technologies into the military leaders’ strategic
threats and organizational culture.
vision, finding political support to pay for implementing that
Energy innovation may add complexity to military logistics—
energy-related vision in a time of relative budget austerity,
it may involve, for instance, managing a mix of biofuels, or
and accessing technical skills to solve energy innovation
generating and storing distributed power rather than using
challenges through DoD’s customer-supplier channels that
standardized, large-capacity diesel generators—but that is not
focus on companies selected in the past for a different set of
necessarily a high barrier to military adoption. The Army has
technological competencies.
always dealt with complex logistics, moving tons of consumables
94 Thomas L. McNaugher, New Weapons, Old Politics: America’s Military Procurement Muddle (Washington, DC: Brookings Institution, 1989); Harvey M. Sapolsky, Benjamin H. Friedman, and
Brendan Green, eds., U.S. Military Innovation since the Cold War: Creation without Destruction (London: Routledge, 2009).
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
44
The Dynamics of Military Innovation and the
Prospects for Defense-Led Energy Innovation
and countless spare parts to the front to feed a vast organization
of many different communities (infantry, armor, artillery,
aviation, etc.), and the Navy’s power projection capability is
built on a combination of planning carefully what ships need
to take with them, flexible purchasing overseas, and underway
replenishment.95 The old saw that the Army would rather plan
than fight may be an exaggeration, but it holds more than a grain
of truth. More than most organizations, the U.S. military is well
prepared to deal with the complexity that energy innovation
will inject into its routines, and even if the logistics system seems
Byzantine and inefficient, the organizational culture does not
have antibodies against this aspect of energy innovation.
On the other hand, investing in base infrastructure has tended
to be a harder task for the military, because with a few exceptions
the quality of facilities at bases is tangential to the organizations’
critical tasks. People may rib the Air Force for the priority attached
to making sure that bases have a decent golf course, but the
bases do not really suffer (or benefit) from overinvestment in
what is perceived as “nice to have” luxuries. It is local politics and
their impact on congressional votes that maintains a robust
number of military bases, and the politics feed on the money
that soldiers and their families spend in the community, not
on paying the additional up-front cost of installing efficient or
experimental energy technologies.96 The military installations
that attract the most innovative spending are the installations
where the spending contributes directly to American forces’
combat edge—bases like the National Training Center that
allow for highly realistic combat exercises. Advocates of energy
innovation are unlikely to meld their pitch smoothly with that
high-end organizational mission. If, instead, they pitch the energy
innovations as “efficiency-enhancing,” they will face the fate
of every other efficiency-enhancing investment that military
have less effect on energy security. More important, operational
energy innovations will be of less interest to the military
customers, who are unlikely to emphasize planning for a repeat
of such an extreme situation as the war in Afghanistan.
Specific military organizations that have an interest in
preparing to fight with a light footprint in austere conditions may
well continue the operational energy emphasis of the past few
years. The good news for advocates of military demand pull for
energy innovation is that special operations forces are viewed as
the heroes of the recent wars, making them politically popular.
They also have their own budget lines that are less likely to be
swallowed by more prosaic needs like paying for infrastructure
at a time of declining defense budgets or by shifting strategic
emphasis toward traditional high-intensity combat. While the
conventional military’s attention moves to preparation against a
rising near-peer competitor in China—a possible future, if not the
only one, for American strategic planning—special operations
may still want lightweight, powerful batteries and solar panels.
Working with industry for defense-led energy innovation
requires treading a fine line. Advocates need to understand
the critical tasks facing specific military organizations, meaning
that they have to live in the world of military jargon, strategic
thinking, and budget politics. At the same time, the advocates
need to be able to reach nontraditional suppliers who have
no interest in military culture and are developing technologies
that follow performance trajectories totally different from
the established military systems. More likely, it will not be the
advocates who develop the knowledge to bridge the two
groups, their understandings of their critical tasks, and the ways
they communicate and contract. It will be the prime contractors,
if their military customers want them to respond to a demand for
energy innovation.
installations could make: energy innovation will be treated as a
low priority somewhere in the mix of desiderata in the budget.
The Defense Industry and Energy Innovation
Operational energy seems especially important and exciting
right now, because the United States is at war—and even more
than that, because the current wars happen to involve a type of
fighting with troops deployed to isolated outposts far from their
home bases, in an extreme geography that stresses the logistics
system. But as the U.S. effort in Afghanistan draws down, energy
consumption in operations will account for less of total energy
consumption, meaning that operational energy innovations will
95 Carl H. Builder, The Masks of War: American Military Styles in Strategy and Analysis (Baltimore: Johns Hopkins University Press, 1989).
96 Kenneth R. Mayer, “Closing Military Bases (Finally): Solving Collective Action Problems through Delegation,” Legislative Studies Quarterly 20, 3 (August 1995): 393–413.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
45
The Dynamics of Military Innovation and the
Prospects for Defense-Led Energy Innovation
4
The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
William B. Bonvillian and Richard Van Atta 97
in the April 2011 continuing resolution. It was designed to
The United States faces powerful economic challenges in the
complicated nexus of the economy, energy, and environmental
incorporate the DARPA model of accelerated innovation in the
issues. In this arena transformative innovation is understood to be
energy technology sector.
a key public policy response. One element of the response has
Short Summary of Paper Elements
been the creation of an energy-DARPA—ARPA-E.
ARPA-E offers a very interesting new institution to meet the
DARPA (Defense Advanced Research Projects Agency) was
formed to address the problem of transformative innovation.
profound energy technology challenge facing the United States.
Instigated by the Sputnik shock of 1958, the Advanced Research
Because it is explicitly modeled on DARPA, this paper reviews
Projects Agency (subsequently renamed the Defense Advanced
the noted DARPA approach in detail. Briefly citing well-known
Research Projects Agency) was created with an explicit mission:
features of DARPA, it explores in detail a number of important
to ensure that the United States never again faced a national
features that have not been well discussed in the policy literature
security “technological surprise,” like Sputnik, due to failure to
on DARPA to date.
The paper then reviews the new ARPA-E model in detail. It
pay adequate attention to and stay focused on breakthrough
technological capabilities. DARPA itself can be categorized
first comments on how ARPA-E has adopted key elements of the
as a disruptive innovation, in that it creates an approach to
DARPA approach. It then discusses new features the ARPA-E has
fostering and implementing radically new technology concepts
been moving toward in a series of areas, largely driven by its need
recognized as transformational.
to confront the unique and difficult demands of the complex
established energy sector where it operates. In addition, the
ARPA-E (Advanced Research Projects Agency–Energy) was
authorized in 2007 by Congress as part of the America COMPETES
further DARPA features enumerated provide potentially useful
Act, was funded with an initial $400 million in the 2009 economic
guideposts to ARPA-E as it continues to support innovation in the
stimulus bill, and received $180 million for fiscal year (FY) 2011
energy sector.
97 William B. Bonvillian is director of the MIT Washington Office and a former senior policy advisor in the U.S. Senate. He teaches innovation policy and energy technology courses on the
adjunct faculties at Georgetown University and at Johns Hopkins-SAIS. Richard Van Atta, a former assistant deputy under secretary at the Department of Defense, is with the Institute for
Defense Analyses and teaches security studies on the adjunct faculty at Georgetown University. An extended version of this paper appears in the October 2011 issue of Journal of Technology
Transfer; readers who wish to see in-text documentation and a complete list of sources cited should consult that version.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
46
The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
Three technology areas stand out as having endured with
Finally, the paper closes with a discussion of the profound
technology implementation problems on the “back end” of the
significant contributions through many projects and phases
innovation system—demonstration, test beds, initial markets—
during most of DARPA’s history: sensing and surveillance;
that the authors believe both agencies must further confront,
information processing; and directed energy weapon technology.
and it develops a working list of recommendations in this regard.
DARPA made seminal contributions in several key aspects
of these technologies. It is fair to say that in the information-
The DARPA Model
processing area, DARPA-supported work was responsible for
the foundations and initial stages of a revolution in information
Well-Known Elements in the DARPA Culture
processing and transfer technology that has seen networked
DARPA is widely understood to embody a series of unique
computers, desktop computing, and the Internet sweep the
organizing principles, not typical of other R&D agencies,
world, and is now having a similar impact on parallel processing.
including these:
n
While DARPA is an advanced projects agency, it is clear that it
A flat, nonhierarchical organization, with empowered
has always had more than a project-by-project perspective; and
program managers
there have been broader, more general themes of the agency’s
n
A challenge-based “right-left” research model
programs. This became clear in the review comments on earlier
n
Emphasis on selecting highly talented, entrepreneurial
DARPA studies conducted by the Institute for Defense Analyses,
in which some former DARPA directors and high-ranking
program managers (PMs) who serve for limited duration
Department of Defense (DoD) R&D executives stated that the
(three to five years)
n
overall motivations and intent of the agency’s research program
Research performed entirely by outside performers, with no
were not adequately conveyed by project-specific write-ups.
internal research laboratory
n
n
Thus, it has often been the case that the projects pursued in
Projects focused on “high risk/high payoff” motif, selected and
specific DARPA program offices were part of a larger portfolio
evaluated on what impact they could make on achieving a
that itself derived from a more overarching view of possibilities or
demanding capability or challenge
challenges in a specific technical or applications domain. These
larger perspectives were usually organic—a DARPA office director
Short-term funding for seed efforts that scale to significant
or a DARPA director saw a broader theme that became the basis
funding for promising concepts, but with clear willingness to
for formulating a set of projects. This was specifically the case
terminate nonperforming projects
in the information technology area that began with the now
But the model goes beyond these well-understood features.
well-known vision of the first Information Processing Techniques
Historically it has embodied a number of other deep features that
Office (IPTO) director, J. C. R. Licklider, and steadily cohered under
should be accounted for.
a set of subsequent directors who were essentially hand-picked
Multigenerational Thrusts
by the prior director—with Licklider even returning after several
years to manage the program for a second tour. Thus, the
DARPA does more than undertake individual projects. It has
information technology evolution within DARPA was guided by
in many instances worked over an extended period to create
a strong overarching perspective, but also by a very conscious
enduring technology “motifs”—ongoing thrusts that have
effort to inculcate the IPTO programs with the vision and to grow
changed the technology landscape. Some notable examples
the technical focus as an increasingly articulated and interrelated
are DARPA’s work in information technology (IT), stealth, and
set of projects.
stand-off precision strike. Some of these foci are what might be
The Strategic Computing Program was begun in 1985 to
termed broad technology stewardship over a family of emergent
consolidate the advances made in information-processing
technologies, including new sensing systems, such as infrared
technologies and to stimulate their application into such areas
sensing, or new electronics devices. In these thrust areas DARPA
as sensing and surveillance, autonomous vehicle operation,
has been able to undertake multigenerational technology
and command and control. Underlying this thrust was the view
thrusts and advances over extended periods, to foster multiple
that significant advances had been made across several aspects
generations of technology.
of information-processing technology, ranging from massively
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
47
The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
parallel computer technologies to image-understanding
Confluence with an Advocate Community
algorithms, and that these different aspects should be combined
DARPA has spawned new economic sectors; these have in
and integrated into experimental applications. A key motivator
turns spawned new firms, which have garnered support from
behind this thrust was the desire by DARPA to take DARPA-
venture capital (VC). Accordingly, DARPA has been able to make
stimulated advances in parallel processing computers beyond
its advances reinforce each other; it has been able to play an
research and into development and applications, with specific
intermediary role with industry in part by building an advocate
focus on such artificial intelligence applications as autonomous
community across sectoral lines. A key element of DARPA’s
vehicle guidance and C31 processing. The resources needed to
success in such areas as information technology, sensor systems,
realize these advances in an integrated manner were seen to
advanced materials, and directed energy systems is building the
exceed what could be accomplished from the comparatively
community of “change agents”—a broad community fostered
small, disparate, but coordinated technology research budgets
over time from its program managers, from “graduates” of the
in the Defense Science and Information Science and Technology
DARPA program who go on to roles in academia and industry,
program offices.
and from contractors in universities and industry trained in the
Another element of the overall information technology thrust
DARPA model and technology approaches.
was DARPA’s program in microelectronics, which was specifically
aimed at developing “sub-micron electronic technology and
Connection to Larger Innovation Elements
electron devices” to “skip a generation in feature size on chips.” 98
Going beyond the confluence with its support community,
This program evolved into the VLSI (Very Large-Scale Integration)
DARPA has been an actor within larger innovation efforts; it is
program, which led to a fundamental revolution in integrated
often instrumental, but seldom a sole actor. This connection to
circuit design and had major impact on computer technology.
larger innovation elements is important to DARPA’s effectiveness
This thrust became the basis for DARPA’s Microelectronics
because it does not have its own research facilities, and its
Technology Office.
program managers do not perform their own research. Thus, the
To summarize, while DARPA is at base an “advanced projects”
DARPA PM’s most important function is to identify and support
agency, it has also developed a capability to undertake
those who have the potentially disruptive, change-state ideas
multigenerational thrusts, in which a series of connected projects
and who will ably perform the necessary research. Thus, the PM
that nurture an overall technology domain are “stood up” over
is an opportunity creator and idea harvester within an emerging
a series of technology generations. DARPA has undertaken this
technology field. From this concept- or idea-scouting perspective
role largely through vision and leadership from particular DARPA
DARPA has spawned a group of researchers, and from that, new
directors and/or office directors.
firms that act to help effectuate the program’s overall vision.
Complementary Strategic Technologies
research community and commercial industry is only one
DARPA has repeatedly launched related technologies that
aspect of DARPA’s connectivity to larger innovation elements.
complement each other and that help build support for the
DARPA, as an agency of the Department of Defense, is part of a
commercialization or implementation of one another. This
broader innovation structure within and for DoD. Crucial here is
concept of complementary technologies also ties to the notion
that DARPA is an independent organization under the secretary
of program thrusts. One way of thinking about this is that
of defense and is explicitly separate from the military service
DARPA is not in the “thing” business—it is in the problem-solving
acquisition system. While the secretary of defense and the
business. While a specific innovation may have a major impact, it
underlying Office of the Secretary of Defense (OSD) bureaucracy
is unlikely that one such project by itself will adequately address
rarely directly involve themselves in DARPA’s individual research
a major challenge or problem. While DARPA may support an
programs, OSD leadership elements at various times have
individual invention, it usually does so because that invention
played a strong role in identifying the mission challenges they
may be an element of an overall solution to a challenge.
want DARPA to address. Thus, DARPA, working with OSD, has
However, this downward and outward linking into the
98 The quotation is from testimony by Dr. Robert Fossum before Congress in 1979; cited in R. Van Atta, S. Deitchman, and S. Reed, DARPA Technical Accomplishments, vol. 3 (Alexandria, VA:
Institute for Defense Analyses, 1991).
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
48
The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
been able to tie its advances to the larger innovation elements
and concepts, often seeding these in university research, and
in DoD, often implementing its technologies through service
then seeking their transition into commercial implementation.
procurement programs.
At various times DARPA encouraged universities to transition
DARPA-funded technologies (such as “inter-netted” computer
Willingness to Take On Incumbents
workstations developed at Stanford) through demonstration
DARPA at times has invaded the territory occupied by powerful
activities with leading computer firms, such as IBM and DEC.
companies or bureaucracies. It drove the desktop personal
However, the existing leading firms often have seen the incipient
computing and the Internet model against the IBM mainframe
technology as being too narrow, too risky, or generally not
model. On the military side of the ledger, cooperating with others
germane to their current market plans, and have not taken on the
in DoD, it drove stealth, unmanned systems, and precision strike
new approach. These new technologies generally do not address
and night vision capabilities—despite the lack of interest from
the current or even projected markets that are the focus of the
and even express objections of the military services. At times
incumbent firms. DARPA has often had to push the potential
these “invasions” have taken special mechanisms beyond or
application of these alternative technologies in areas where such
outside of (but in coordination with) DARPA to achieve.
current markets do not exist.
On militarily specific technologies DARPA operates under a
A critical feature in this DARPA effort has been to link to
motif that is expressly separated and different from that of the
the VC community, which was looking for tech entries that
military services; DARPA focuses more on breakthroughs and
offered prospects of rapidly creating new markets. DARPA
does not work on projects directly related to existing, expressly
became a key lead funder of advanced technologies that VC
stated military requirements, which are inherently shorter term
firms could then seek to bring into rapid commercialization;
and engineering oriented. Thus, the concepts and technologies
the VC sector emerged in parallel with DARPA’s support of
that DARPA explores provide capabilities that usually challenge
information technology. In addition, the DARPA imprimatur gave
and even disrupt the services’ technology development and
an indication to VC firms that the technology had some level
implementation interests. DARPA does try to involve the service
of technical merit and had been vetted by very knowledgeable
R&D communities as prospective “customers” of its R&D as a
technologists. In addition, DARPA could foster the initial market
means to foster transition. But for technology developments that
by providing funds in related implementation-oriented DoD
are outside the usual systems that the services employ, transition
projects to acquire the newly developed technologies—that is,
often has been difficult and has required the involvement of
DARPA has at times filled the role of the lead customer willing to
executives from the highest levels of the OSD. This was the
incur the higher costs and risks of the new technology in order
case for stealth aviation, unmanned aerial vehicles (UAVs), and
to gain the value it afforded. This was, for example, the case
standoff precision strike. The involvement of higher-level OSD
with the acquisition of Sun Microsystems and Silicon Graphics
officials has been required to overcome the services’ uneasiness
workstations by DARPA VLSI projects to enable the design of
about bringing fundamentally new and different concepts into
more sophisticated integrated circuits. At other times DoD
an existing operational environment, with the attendant risks
military users and contractors have wanted to acquire DARPA-
and costs. One OSD effort to overcome these risk actors was the
supported technologies, such as early language translation
Advanced Concept Technology Demonstration program within
systems, that provide security value ahead of commercial market
OSD that explicitly began as a means to get advanced, prototype
acceptance. Thus, at times the power of DoD procurement can
UAVs, such as Predator, into experimental use in actual military
get around established technology markets and create initial
operations. Another example of high-level OSD involvement
markets for the alternative technologies. This ability to bring new
was then–under secretary for defense research and engineering
technologies to initial markets is a capability that few agencies—
William Perry managing the implementation of the F-117A
for example, DOE—have.
stealth program directly out of his office.
Role as First Adopter/Initial-Market Creator
On non-military-specific technologies DARPA has developed
and implemented technologies that came to fruition despite
In addition to ties to demonstration capabilities, DARPA
the presence of existing firms with incumbent technologies.
has undertaken a technology insertion or adoption role. In
DARPA has not generally sought to take on existing firms directly;
coordination with other parts of DoD, it has been able to create
rather it has sought the development of new technologies
initial or first markets for its new technologies.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
49
The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
Ties to Leadership
DARPA has been particularly effective when it is tied to senior
leaders who can effectuate its technologies through DoD
or elsewhere. Because DARPA operates at the front end of the
innovation process, it historically has required ties to senior
DoD leaders to align with the follow-on back end of the
innovation system.
Connected R&D
DARPA embodies what is termed “connected R&D”; it is not
throwing its prototype technologies over the monastery wall,
using a theory of “benign neglect” in the face of markets. It
often uses DoD procurement to further its advances, and it
funds, as discussed above, creative companies that can attempt
to commercialize its products: it tries to guide its successful
developments into commercialization, and builds portfolios of
technologies to build depth for a technology thrust in emerging
markets. It is in the opportunity-creation business, in some cases
picking technology “winners.” In DARPA’s exploration of radical
innovations it is generally recognized that its developments are
ahead of the market; the research it is fostering does not meet
an existing market need, but instead is creating a capability—a
new functionality—that may (if successful) create a new market
or application.
In conclusion, the above discussion of DARPA cited the
well-known elements of its innovation culture, and focused
on a number of less well-understood elements that have been
important to its strength and capabilities. Both types of elements
offer lessons in the energy technology sector to ARPA-E, which
will be explored below. In addition, DARPA is not perfect, and a
number of problems it has faced (not listed) also offer lessons.
ARPA-E: A New R&D Model for the
Department of Energy
Replicating Basic DARPA Elements
rule set and reviews how ARPA-E reflects and has adapted that
model. ARPA-E is a flat, nonhierarchical organization, effectively
with only two levels: eight program managers and a director.
Like those in DARPA, the program managers are “empowered,”
each with strong authority and discretion to administer a
portfolio of projects in a related energy field, from storage to
biofuels to carbon capture and sequestration. As in DARPA, the
project approval process is streamlined—the PMs evaluate and
conceive of the research directions for their portfolios. Essentially,
there is only one approval box to check—the director—who
retains approval authority before the contract is awarded, which
generally goes very quickly. Although ARPA-E uses strong expert
reviews to guide PM decisions, there is no peer review where
outside researchers make the actual final decisions on what gets
funded. As at DARPA, this PM selection process generally avoids
the conservatism and caution that often afflicts peer review,
which tends to reject higher-risk research awards if there are
more than four applicants per grant award.
Like those in DARPA, the PMs use a “right-left” research
model—they contemplate the technology breakthroughs they
seek to have emerge from the right end of the pipeline, then go
back to the left end of the pipeline to look for proposals for the
breakthrough research that will get them there. In other words,
like DARPA, ARPA-E uses a challenge-based research model—it
seeks research advances that will meet significant technology
challenges. Like DARPA, ARPA-E tends to look for revolutionary
breakthroughs that could be transformative of a sector—thus far,
it has had a penchant for high-risk but potentially high-reward
projects. ARPA-E’s design is metrics driven and “challenge based”
for funding opportunities. Metrics are defined in terms of what
will be required for cost-effective market adoption in the energy
industry. PMs propose to the research community what will
be required in terms of technology cost and performance for
adoption, and then ask this community to pursue this goal with
transformative new ideas.
Like DARPA, ARPA-E’s PMs are a highly respected, technically
ARPA-E was consciously designed by Congress to apply the
talented group, carefully selected by a director who has asserted
DARPA model to the new energy technology sector. It is about
that there is no substitute for world-class talent. Typically, the PMs
the size of a DARPA program office. It has emphasized speed—
have experience in both academic research and in industry, usually
rapidly moving research breakthroughs into technologies,
in start-ups, so they generally know from personal experience the
through a process it labels “Envision-Engage-Evaluate-Establish-
journey from research to commercialization. Recognizing that
Execute.” With funding received in the 2009 stimulus legislation
the ability to hire strong talent quickly was a key DARPA enabler,
cited above, it has awarded funding in six energy technology
the House Science and Technology Committee, which initiated
areas through spring 2011.
the ARPA-E authorization, gave ARPA-E, like DARPA, the ability
The discussion below lists well-known elements in the DARPA
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
to supersede the glacial civil service hiring process and rigid
50
The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
pay categories. In fact, ARPA-E’s broad waiver of civil service hiring
New Elements at ARPA-E
authority may be without precedent in the federal government.
Thus far, we have described ARPA-E as though it were a clone
Like DARPA’s, ARPA-E’s research program is organized around
of DARPA. However, ARPA-E faces a very different technology
the three-to-five-year lifetime of its PMs. By statute ARPA-E’s
landscape than DARPA. DARPA has been able to launch its
PMs are limited to three years of service (although this can be
technologies into two territories that simplified its tasks.
extended), so like DARPA’s PMs, ARPA-E’s PMs must work to get
First, it has often been able to place its technologies into the
their projects into prototype and implementation stages in the
procurement programs of the military services. In this approach,
three or so years they are at ARPA-E. Thus, the project duration
the military is able to serve as the test bed and initial “first” market
yardstick is the life of the PM. This means that ARPA-E must forgo
for new technologies emerging from DARPA. Second, DARPA
much long-term research; it must build its project portfolio by
launches its technologies into civilian sectors; its keystone role
seeking breakthroughs that can move to prototype in—for
in the IT sector is the most famous example. The IT revolution
science—a relatively short period. It will aim, therefore, like
DARPA nurtured was a technology frontier, an example of “open
DARPA, at innovation acceleration—projects that can move from
space” technology launch.
idea to prototype in the program life of its program managers.
The House Science and Technology Committee, mirroring DARPA,
also emphasized the availability to ARPA-E of highly flexible
In contrast, the energy sector that ARPA-E must launch into is
occupied territory, not open space. Energy is already a complex
established legacy sector (CELS). New energy technologies
contracting authority, so-called “other transactions authority,”
have to perform the technology equivalent of parachuting
which enables ARPA-E to emulate DARPA’s ability to quickly
transact research contracts outside of the slow-moving federal
into the Normandy battlefield. Because it faces a very different
procurement system. Although this authority has not yet been
launch landscape than DARPA, ARPA-E is learning to vary its
fully utilized, it remains promising as ARPA-E moves into new
organizational model. In addition, ARPA-E has assembled what
areas, such as prize authority, discussed below.
is by all accounts a talented team; team members have put in
Like DARPA, ARPA-E is also instituting the “hybrid” model,
place their own ideas on how to operate their new agency, as
providing funding support for both academic researchers and
well. Thus, ARPA-E is not simply replicating DARPA; it is finding
small companies and the “skunk works” operations of larger
and adding its own elements appropriate to the complex energy
corporate R&D shops. DARPA has often tied these diverse
sector where it concentrates and appropriate to its own staff.
entities into the same challenge portfolio and worked to
Sharpening the Research Visioning, Selection,
and Support Process
convene them together periodically for ongoing exchanges.
This has tended to improve the handoff from research to
development by combining entities from each space, easing
ARPA-E’s director and PMs emphasize that they are working in
technology transition. Like DARPA, ARPA-E has worked from
what they call “the white space” of technology opportunities.
an island/bridge model for connecting to its federal agency
Starting with their first research award offering, they assert
bureaucracy. For innovation entities in the business of setting
they have consciously attempted to fund higher-risk projects
up new technologies, the best model historically has been
that could be breakthroughs and transformational in energy
to put them on a protected “island” free to experiment, and
areas where little work previously has been undertaken. This
away from contending bureaucracies—away from “the suits.”
means that their research awards are purposely made seeking
ARPA-E, as it was set up within DOE, has required both isolation
transformations, not incremental advance. Comparable to
and protection from rival R&D agencies and the notorious
DARPA’s model, this approach has placed technology visioning at
bureaucratic culture at DOE that may battle it for funding and the
the very front of the ARPA-E’s research nurturing process.
independence it requires. From the outset, therefore, it needed
ARPA-E has implemented an interesting two-stage selection
a bridge back to top DOE leadership to assure it a place in DOE’s
process, in which applicants have a chance to offer feedback
R&D sun. It received this from Energy Secretary Steven Chu, who
to the initial round of reviews. Because ARPA-E’s director, like
was one of the original proponents of ARPA-E while serving on
many researchers, had been personally frustrated by peer review
processes in which the reviewers showed limited understanding
of the science and technology advances behind his applications,
he implemented a unique review process where his PMs allowed
the committee that produced the National Academies’ Gathering
Storm report, and later testified in support of ARPA-E before the
House Science and Technology Committee in 2006.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
51
The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
applicants to respond to their application reviews, followed by a
further evaluation step. This “second shot” and “feedback loop” in
the review process has improved evaluations because the PMs
know their conclusions will be critiqued, has helped educate PMs
in new technology developments, and has resulted in a number
of reconsiderations of applications, improving the overall ARPA-E
research portfolio.
The empowered program manager culture. There are eight
PMs at ARPA-E as of this writing; there are no office directors,
who in DARPA serve as an intermediate stage between PMs
and the director. Because ARPA-E is roughly the size of a large
DARPA office, it simply doesn’t need them yet. Each PM picks
his or her own inquiry areas; there is no overall technology plan.
However, PMs do form macro challenges within the sectors they
initiate with the director—for example, seeking a zero emission,
long-range electric car. PMs therefore retain the flexibility of
not being tied to a fixed ARPA-E-wide technology strategy. PMs
also retain a great deal of control over their research portfolios,
so are “empowered” like DARPA PMs, although they still have to
persuade the director to support their program decisions. PMs
have to have what they refer to as “religion”—they must have a
vision of where they want to take their portfolios, performing as
vision champions, in order to sell their projects both inside and
outside ARPA-E. Part of “religion,” then, is that they must work on
being vision implementers. ARPA-E PMs expressed the view that
this is the single most critical PM quality, aside from technical
excellence. ARPA-E has purposely not created a formal personnel
evaluation process for its PMs—like those in DARPA, PMs say they
are expected to “manage to results,” and they are judged by the
director and their colleagues based on the outcomes, impact,
and results of the portfolios they select.
Additional mechanisms for talent support. Under the
ARPA-E fellows program, five outstanding recent PhDs help staff
each PM and fill out the capability of each team. This institutional
mechanism apparently may be responsible for a creative process
of intergenerational contact and mentoring within ARPA-E,
further ensuring that it becomes a continuous education
environment, a key feature for creative R&D organizations. The
new fellows also have been meeting as a group to attempt to
come up with their own on new ideas. DARPA has no comparable
group to help augment internal intellectual ferment. ARPA-E is also
considering creating its own team of senior advisors—“technology
wisemen,” in short—who spend time at ARPA-E through frequent
around a particular challenge area, PMs say they have found that
visits and so contribute to the PM teams.
funding competitors and turf incursions. These sharks include
they need a “risk mix.” They generally include some “out there”
projects that may or may not materialize, that are very high risk,
but that are well worth pursuing because, even though they
are far from implementation, the technology is potentially so
important. But for most other portfolio technologies, the PMs
want to see that they could be implementable in a reasonable
period and that they could reach a cost range that would
facilitate entry and commercialization. Some PMs find they need
to emphasize more early-stage science in their portfolios than
other PMs because their portfolio sectors require more frontier
advances—so there is a mix, too, within portfolios, which balance
between frontier and applied, science and technology emphasis.
The grant approval rate varies between technology sectors, but
(following the initial 2009 open-ended offering), PMs indicate the
rate ranges from 5 to 10 percent.
Like those in DARPA, ARPA-E PMs have adopted a handson relationship with award recipients, talking and meeting at
frequent intervals to support their progress and help them
surmount barriers, and, when ready, to promote contacts with
venture and commercial funding. In most research agencies, the
job of the PM focuses on the award selection process; in ARPA-E,
this is only the beginning. PMs view their jobs as technology
enablers, helping their tech clients with implementation barriers.
Building a Community of Support
While Congress in designing new science and technologies
agencies may get either the substantive design or the political
design right, it does not often get both right. In other words, the
creation of an agency that is sound and effective from a public
policy and substantive perspective, as well as politically strong
enough to survive, is a challenging policy design problem.
ARPA-E was founded on a well-tested substantive model, the
DARPA model, so as long as its leadership struggled to fulfill
that complex design, there was some assurance of success from
a policy perspective. Although the history of DARPA clones is
not generally a positive one, ARPA-E’s leadership has made the
ARPA-E clone a widely acknowledged success. However, ARPAE’s political design has been a more complex problem; from
the outset it has faced a political survival challenge. In part this
is because it is a small, new agency fish in a cabinet agency
filled with large agency sharks constantly on the prowl against
All ARPA-E projects are selected, as discussed above, to be
such long-standing major entities as the Office of Science, the
game changers—to initiate energy breakthroughs. However,
applied agencies, including the Office of Energy Efficiency and
within that broad requirement, as portfolios are assembled
Renewable Energy (EERE), and the seventeen national energy
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
52
The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
laboratories. To increase its chances of survival, ARPA-E needed
that they have selected one project each from EFRCs located at
not simply to avoid conflict with its large neighbors but to
research universities.
affirmatively turn them into bureaucratic allies and supporters.
Collaboration with the national energy labs has also
Moreover, it also needed to build support outside DOE, from the
proven a challenge. Because the labs are large employers, they
energy research community it serves and from industry. All this
have tended to become independent political power bases.
had to be translated into congressional support.
However, ARPA-E has included labs in its research consortia,
ARPA-E therefore has worked from the outset on building
hoping the labs will view it as not simply a funding competitor
internal connections within DOE. The Department’s R&D is
but a funding supporter.
Summit. ARPA-E has worked at building relations with VC
organized into stovepipes. The Office of Science, a traditional
fundamental science–only agency organized on Vannevar Bush–
firms and large and small companies, and with awardees and
style basic research lines, funds its own nest of national labs as
nonawardees, through its annual Energy Innovation Summit.
well as university research and reports to its own undersecretary.
Begun in the spring of 2010, this widely attended summit has
DOE’s applied agencies, including EERE and fossil, electrical,
become a major technology showcase event in Washington,
and nuclear offices, fund development work primarily through
attracting large attendance and featuring prominent business,
companies and report to their own undersecretary. DOE’s
executive branch, and bipartisan congressional leaders in
organization thus severs research from development stages, and
speaking roles. At these summits ARPA-E has featured its
historically very few technologies cross over the walls of the two
awardees as well as other strong applicants who did not receive
sides of the DOE organizational equation, basic and applied. In
awards but deserve attention. VC firms and companies swarmed
theory, ARPA-E could serve both sides by drawing on basic ideas
around their technologies, building good will among attendees,
coming out of the Office of Science that could be accelerated,
whether they won awards or not. Importantly, by highlighting
pushing them to prototypes, and then building ties with EERE
new energy technologies of interest to many sectors and firms,
and the applied agencies to undertake handoffs for late-stage
the summits have helped in building an advanced energy
development and demonstration. ARPA-E could thus serve both
technology community around ARPA-E.
sides by working to be a technology connector within DOE.
Support community. ARPA-E faced a major funding
There are potential downsides to playing the connector
challenge in FY2011, when a change in political control of the
role—in some cases at DARPA it has been seen as inconsistent
House of Representatives and growing concerns over spiraling
with performing the role of transformation instigator. However,
federal deficits led to cutbacks in federal agency funding.
ARPA-E has attempted this task, and met with success in forging a
As noted, because ARPA-E received no funding in FY2010 (it
working alliance with EERE, a much larger agency with a budget
received two years of initial funding in FY2009 through stimulus
of $2 billion a year. ARPA-E has EERE experts on its review teams
legislation), it needed affirmative legislation to survive. As a
and draws on their expertise; it has received strong support as
result of the good will that had been built in its first two years
well from EERE’s leaders, who are working with ARPA-E on the
of operation, a community of support began to collect around
handoff process described above (and discussed further below).
ARPA-E to independently advocate for the agency’s future with
Integration with the Office of Science (SC) is still a work in
congressional committees, including VC firms, large and small
progress. SC very much views itself as a basic research agency,
firms that worked with ARPA-E, and universities, all enamored of
and rejects work on applied research, assuming it is the job
its research model.
of other parts of DOE to manage those efforts. It funds a wide
In summary, not only has ARPA-E proven a strong substantive
variety of basic physical science fields, aside from basic energy-
success to date from a public policy perspective, but a political
related research. Managers at SC generally view themselves
support base appears to be emerging that could help sustain
not as technology initiators but as supporters for the actual
it over time. ARPA-E could be in a position to achieve that rare
researchers located in SC’s national labs and in academia.
combination, an integrated political design model, marrying
This represents a genuine culture clash with the energy
political support with sound substance.
breakthrough orientation of ARPA-E PMs. However, some
attempts have been made to connect with the 46 new Energy
Technology Implementation
Frontier Research Centers (EFRCs) formed by SC to focus on
ARPA-E’s director and PMs are acutely aware of their difficult
energy research in promising areas; two of ARPA-E’s PMs report
task in launching technology into the complex established
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
53
The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
legacy sector of energy. ARPA-E has therefore taken a number
that its home organization, DOE, generally does not engage in
of steps to assist in taking its technology to implementation,
the innovation process beyond late-stage development and
commercialization, and deployment. ARPA-E PMs consider the
prototyping support.
Commercialization team. ARPA-E has assembled on staff
implementation process for technologies they are considering;
before they fund a project they evaluate the technology stand-
a separate team working full time to promote implementation
up process and how that might evolve. Their focus is not simply
and commercial advances for ARPA-E technologies. These team
on new technology; they seek to fund projects where they can
members work with particular PMs on the most promising
see a plausible pathway to implementation. This is aided by
technologies emerging from their portfolios. The tactics this team
the fact that ARPA-E PMs generally have both academic and
develops in implementing technologies can include follow-on
commercial sector experience.
approaches for ARPA-E-funded technologies through in-reach
“In-reach” within DOE. ARPA-E is working on building ties,
with DOE applied programs, connections to DoD test beds
as suggested above, with applied programs in DOE so these
and procurement, and connections to VC firms and interested
agencies can be ready to pick up ARPA-E projects and move
company collaborators, or combinations of these. The team’s
them into the applied, later-stage implementation programs they
work includes identifying first markets and market niches for
run. ARPA-E’s PMs have found that key to this DOE “in-reach” is
ARPA-E technologies.
“Halo effect.” ARPA-E is consciously taking advantage of the
building relationships between PMs and applied line scientists
and technologists in the applied entities, particularly EERE, the
“halo effect” whereby VC firms and commercial firms pick up
Fossil Energy Office, and the Electricity Office. This is a bottom-
and move toward commercialization of the technologies that
up connection process. Meanwhile, in a top-down process, the
are selected by ARPA-E as promising. In other words, the private
ARPA-E director has worked in parallel at building ties between
sector views the ARPA-E selection process as rigorous and sound
his office and the leadership of the applied agencies at DOE. But
enough that it is prepared to fund projects emerging from that
the PMs believe bottom-up connections are the key to “in-reach”
process. ARPA-E recently announced, for example, that six of
success—without support deep in the applied bureaucracies,
its early projects, which it funded at $23 million, subsequently
transfers simply won’t happen, whatever the leadership levels
received over $100 million in private sector financing. This effect
agree to.
has been seen at DARPA and at the Department of Commerce’s
Advanced Technology Program (renamed the Technology
While DOE in-reach is part of the answer, another logical step
for ARPA-E is to connect with DoD agencies potentially interested
Investment Program). The VC or financing firm will perform
in ARPA-E technologies for DoD needs, given the latter’s depth in
its due diligence regardless, but ARPA-E’s selection helps in
test bed capabilities and first-market opportunities, which remain
identifying and, in effect, validating, a candidate pool.
Connecting to the industry “stage gate” process. The stage
gaps in DOE’s innovation system.
ARPA-E is in fact working on building ties to DoD for test
gate process is used by most major companies in some form in
beds and initial markets. DOE has executed a memorandum of
the management of their R&D and technology development. In
understanding with DoD, but implementation is still largely at
this approach, candidate technology projects are reevaluated at
the discussion stage, and results are still “in progress.” DoD and
each stage of development, weeded out, and only what appear
ARPA-E have recently partnered on two projects, however. DoD’s
to be the most promising from a commercial success perspective
own efforts on energy technology are just now coming into
move to the next stage. This is not a process ARPA-E employs; like
effect, but it is pursuing energy technology advances to meet
DARPA (as discussed above), it places technology visioning up
its tactical and strategic needs, as well as to cut energy costs
front in its process and adopts a high risk/high rewards approach
at its more than 500 installations and 300,000 buildings. As an
to meet the technology vision. Although ARPA-E’s is a more fluid
indication of its serious intent, ARPA-E has on staff a technologist
and less rigid, vision-based approach, it has recently started to
with significant defense contractor experience (he is on the
work with its researchers to get their technologies into a format
Commercialization Team; see discussion below) working full
and condition to survive in the industry stage gate process. For
time on collaboration with DoD. The potential role of DoD to
academic researchers in particular, this is not a familiar process.
Consortia encouragement. Aside from stage gate
test and validate and to offer an initial market for new energy
technologies is well understood at ARPA-E, offsetting the fact
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
connections to industry, in a different kind of outreach effort,
54
The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
ARPA-E is building an additional industry connection step
between the firms and academics that it works with and the
industries they must land in—consortia promotion. ARPA-E
tries to pave the way for acceptance of its new technologies at
firms by working to encourage companies that work in similar
areas to talk to each other on common problems, including
on technology solutions that APRA-E’s current or prospective
projects could present.
Prize authority. Following in DARPA’s footsteps, ARPA-E
has authority to offer cash prizes for meeting technology
challenges and is considering how to use it. This could be
an additional creative tool for technology acceleration and
implementation but may require unique adaptations to fit the
legacy energy sector.
To briefly summarize, then, ARPA-E has not only worked to
replicate elements at DARPA, but it has attempted to build new
elements in its innovation rule set as it confronts unique features
of the energy sector where its technologies must land and of the
DOE bureaucracy it must work with. These new elements can be
grouped into three broad areas, as detailed above: sharpening
the research visioning, selection, and support process; building a
politically survivable support community; and implementing and
deploying its technology advances. Organizational tools in these
categories being developed at ARPA-E present lessons that could
be relevant and useful to other innovation agencies.
implementation of one another. Launching bundles of related
Relevance of the Additional DARPA Features
for Applicability to ARPA-E
efforts. It can play an instrumental role in these larger innovation
ARPA-E builds out its technology portfolios, it could work to
envision linked and crossover technology advances, supporting
complementary efforts.
Confluence with an advocate community. DARPA created
a broad and sizable community over time from its PM “graduates”
and numerous award recipients in both universities and industry.
ARPA-E started out on a much smaller scale than DARPA, but
needs to consciously work to build its community to make
community members not only supporters for its continuation
but an allied group of change agents. Its summit is a useful
initial organizing mechanism in this regard, but ARPA-E will need
additional mechanisms to achieve this.
Connection to larger innovation elements. DARPA has
spawned new technologies that rose and converged with VC
and entrepreneurial support and led to new economic sectors,
particularly in IT fields. Thus, DARPA has been able to play
an intermediary role with industry and to make its advances
reinforce sectors that support them, creating a mutual synergy.
ARPA-E will need to consider this approach with the firms and
sectors it collaborates with, including those providing capital
support, as its technologies advance. It is already moving in this
direction, as the discussion of the new elements in its model
suggests, becoming an actor connected with larger innovation
systems, seldom as a sole actor, but instead as a team creator and
A number of DARPA capabilities not generally noted in the
literature to date have potential relevance to ARPA-E in
strengthening its operations and enhancing its future capabilities.
These are organizational options that are not necessarily relevant
to ARPA-E’s current start-up phase but that it could consider as it
continues to evolve.
Multigenerational thrust. As noted, DARPA has been able
not only to undertake individual technology projects, but to
work over an extended period to create enduring “motifs”—
generations of new applications within a technology thrust that
have changed technology landscapes over an extended period.
The approach ARPA-E is now implementing of projects with a
three-to-five-year duration based on the expected “life” of its
PMs will likely require supplementing with a multigenerational
model, because many energy technologies will require ongoing
advances before they reach maturity and optimal efficiency.
Strategic relations between technologies. DARPA
has launched related technologies that complement each
other and help build support for the commercialization or
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
technologies could similarly alter the energy landscape. As
player. The DARPA approach—in which its technologies spawned
numerous IT firms that help effectuate its overall vision and are
linked to other supporting elements in DoD—offers lessons for
ARPA-E. As its technologies progress, it will need to consider the
appropriate models for this kind of connection in the complex
energy sector.
Willingness to take on incumbents. DARPA historically
invaded territory occupied by companies or bureaucracies when
it needed to foster technology advances. Perhaps the most
famous example is how, in an effort to develop new command
and control systems, it drove desktop personal computing and
the Internet to displace the IBM mainframe model, in a classic
example of disruptive technology launch. Because energy is a
CELS, conflict with legacy firms with established technologies will
be frequent and inevitable for ARPA-E. Accordingly, it will need
to further build its support communities if it is to be successful
in launching its technologies (see discussion on community
building above). In addition, it will need to continue to enhance
its technology implementation capabilities.
55
The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
Role as first adopter/initial-market creator. DARPA
has frequently undertaken a technology insertion role; in
coordination with other parts of DoD it has been able to
create initial markets for its new technologies, allowing the
Department to serve as first technology adopter. DOE offers no
comparable first market for ARPA-E technologies. Given DoD’s
interest in energy technology advances, it could serve as an
initial market. ARPA-E will need to develop further strategies to
find first adopters and initial markets, because the lack of track
records of costs and efficiencies constitutes a serious barrier to
commercializing and scaling new energy technologies.
Ties to technology leadership. DARPA has been particularly
effective when it is tied to senior leaders who can effectuate
its technologies through DoD or elsewhere. ARPA-E has been
effective to date, as discussed above, in securing a network of
leaders in the department, in the White House, and on Capitol
Hill to support it, but it will need to continually work to bolster its
ties to energy decision makers.
Connected innovation. DARPA has embedded itself in a
connected innovation system, taking advantage of DoD’s ability,
as noted above, to operate at all stages of innovation, from
research, to development, to prototype, to demonstration, to test
bed, to initial-market creation. ARPA-E recognizes that because
it will be launching its technologies into a CELS, it may be able
to use DoD test bed and procurement roles, as discussed above,
to further its advances. It can also fund creative companies
that have the capability to commercialize its technologies into
products, and that can otherwise guide its technologies into
commercialization, building portfolios of technologies for depth
in technology thrust into emerging markets. It can also leverage
its technologies against regulatory mechanisms, such as fuel
economy and appliance standards, or state renewable portfolio
standards. These and additional tools will need to be sharpened.
The Remaining Technology
Implementation Challenge for
DARPA and ARPA-E
Both DARPA and ARPA-E face a profound challenge in technology
implementation. For DARPA, the Cold War era of major defense
acquisition budgets is long gone, and defense “recapitalization”—
replacement of the existing generation of aircraft, ships, and land
vehicles with new defense platforms—is evolving at a glacial
pace. Finding homes for its evolving technologies, therefore,
has increasingly become a difficult task for DARPA. Because
technology transition was once a relatively straightforward task
for DARPA, it has not yet fully faced up to the implications of how
complex it has now become. ARPA-E faces a technology transfer
problem of the first magnitude: the U.S. has a very limited history
of moving technology advances into and transforming CELS,
including in energy.
Although ARPA-E faces a long list of challenges, the problem
of technology implementation is perhaps the most profound.
This is because of the difficulty new energy technologies face,
not only with the problem of the Valley of Death in moving from
research to late-stage development, but the problem endemic
to CELS of market launch—implementing technology at scale.
ARPA-E has worked imaginatively to structure new elements into
its model to address this problem. The models of the Strategic
Environmental R&D Program (SERDP) and Environmental Security
Technology Certification Program (ESTCP) from DoD, where
the R&D entity directly hands off to the test bed, provides an
interesting new model in the energy area for ARPA-E to consider
as it focuses on technology implementation. Collaboration
with these programs, which ARPA-E is actively working on, may
provide a crucial new tool set. ARPA-E is not alone in facing this
implementation problem; the applied agencies at DOE, led by
EERE, face a similar problem, and the SERDP/ESTCP combined
model of R&D-test bed-deployment offers an interesting new
approach. DARPA, too, despite remarkable past successes, is not
immune, as suggested above, from the implementation problem,
which appears to be growing. It, too, might learn lessons and
make further uses of the SERDP/ESTCP approach.
In summary, implementation presents a major challenge
for both agencies. DARPA needs to consider its existing portfolio
of implementation support, and consider better connection to
available tools (such as Mantech and the Defense Production Act,
for example) for its manufacturing initiatives. ARPA-E has worked
imaginatively on its implementation capabilities, but the complexity of its task requires it to consider additional mechanisms.
ENERGY INNOVATION at the DEPARTMENT of DEFENSE:
ASSESSING the OPPORTUNITIES
56
The Energy Technology Challenge:
Comparing the DARPA and ARPA-E Models
List of Workshop Participants
While this report draws from the workshop held in
Washington, DC on May 25, 2011, it does not represent
the views, individual or collective, of the workshop
participants or their organizations. We are grateful
for their time and their insights.
Fred Beach
Postdoctoral Fellow,
University of Texas at Austin
William Bonvillian
Washington Office Director,
Massachusetts Institute of Technology
Hanna Breetz
PhD Candidate,
Massachusetts Institute of Technology
Kay Sullivan Faith
Graduate Fellow, RAND
Erica Fuchs
Assistant Professor of Engineering and Public Policy,
Carnegie Mellon University
Ken Gabriel
Deputy Director,
Defense Advanced Research Project Agency
Anthony Galasso
Director of Advanced Integration Capabilities,
Boeing Phantom Works
Project Staff and Affiliates
David Garman
Consultant
Daniel Sarewitz
Co-Director,
Consortium for Science, Policy and Outcomes,
Arizona State University
Eugene Gholz
Associate Professor of Public Affairs,
University of Texas at Austin
Samuel Thernstrom
Senior Climate Policy Advisor,
Clean Air Task Force
Sherri Goodman
Senior Vice President,
Center for Naval Analysis
John Alic
Consultant
Kevin Hurst
Assistant Director for Energy R&D,
Office of Science and Technology Policy
John Jennings
Deputy Director for Innovation,
Office of the Assistant Secretary of Defense,
Operational Energy
Travis Doom
Program Specialist,
Consortium for Science, Policy and Outcomes,
Arizona State University
Joseph Chaisson
Research and Technical Director,
Clean Air Task Force
Todd Laporte
Professor of Political Science,
University of California Berkley
Armond Cohen
Executive Director,
Clean Air Task Force
George Lea
Military Branch Chief, Engineering and Construction,
U.S. Army Corps of Engineers
Nate Gorence
Associate Director for Energy Innovation,
Bipartisan Policy Center
Sasha Mackler
Bipartisan Policy Center
Jeffrey Marqusee
Executive Director, SERDP and ESTCP,
U.S. Department of Defense
William McQuaid
Liaison for DoD Energy Conservation Programs,
Office of Management and Budget
Srini Mirmira
Commercialization,
Advance Research Projects Agency-Energy
Dorothy Robyn
Deputy Under Secretary of Defense,
Installations and Environment
Richard Van Atta
Institute for Defense Analyses
Andrew Wiedlea
Defense Threat Reduction Agency
Aubrey Wigner
Graduate Student,
Arizona State University
Suzanne Landtiser
Graphic Designer,
Fine Line Studio
Consortium for Science, Policy and Outcomes
at Arizona State University
Arizona State University
1834 Connecticut Avenue NW
Washington, DC 20009
202-446-0386
www.cspo.org
18 Tremont Street
Boston, MA 02108
617-624-0234 ext.10
www.catf.us